China has increased purchases as well as buying record amounts of Russian energy last month, according to reports, while Europe shuts off the faucets on Russian oil shipments.
At the same time, Chinese imports of Russian crude oil have grown by 55 per cent in May as compared to the same month last year, replacing Saudi Arabia as China’s main oil supplier.
Due to international sanctions imposed on Russia and its energy sector as a result of its invasion of Ukraine, Chinese oil refiners have benefited from the discounted supply of Russian crude.
According to the Chinese General Administration of Customs, a record 8.42 million tonnes of crude oil, or 1.98 million barrels per day, entered China last month via Siberia and through the far-eastern ports of Russia.
Russia has looked for new markets for its energy goods after losing out on the European market, with the exception of Hungary, Czechia, and Slovakia, which chose to keep their Russian oil supply. Moreover, Russia is able to mitigate the effects of Western sanctions and maintain funding for its expensive conflict against Ukraine by growing other markets.
China also bought 56% more Russian liquefied natural gas over the same period in 2021 than it did before (LNG). LNG deliveries from Russia’s far-eastern gas pipelines increased by 22% in the first five months of this year.
After a 19-month absence, Russia just reclaimed the top spot among countries that buy crude oil, showing that Moscow can evade international sanctions through price cuts.
Additionally, “Russia has diverted a large share of exports to India and China,” stated energy analyst Sergei Vakulenko for the Carnegie Endowment for International Peace. He also said that Western sanctions meant that Russia would likely take over the Asian market in years to come.
In the previous year, Russia sold about 33 billion cubic metres of gas to Asia, which is less than 20 per cent of the size of the European market. Nevertheless, experts warn that Russia will slowly attempt to shift its infrastructure to increase regional sales.