After Moscow slashed oil prices due to Western sanctions imposed on the country over the war in Ukraine, Russia has become China’s largest oil supplier, displacing Saudi Arabia.
The unprecedented sanctions the West has adopted against Russia for its invasion of Ukraine are what has caused the global economic slowdown, and Moscow blames Europe and the United States for that.
China imported nearly 8.42million tons of Russian oil in May, nudging out Saudi Arabia which exported a total of 7.82million tons to China.
Beijing increased the oil imports by 55% over the past year to capitalize on low prices brought about by western countries which are refusing to buy Russian oil in the wake of the conflict. Sinopec and Zhenhua Oil, the Chinese state oil giants, have increased their Russian crude purchases in recent months, refining the oil and selling it on.
With trade volumes hitting $147billion in 2021, according to Chinese customs data, Beijing is Moscow’s largest trading partner.
It has become obvious that western sanctions have been undermined by the discounts of up to 30% to the Russian crude price, sparking fears that Russia will continue to find funding for its war in Ukraine. Moscow has also looked for new markets and suppliers to replace the major foreign firms that left the country following the invasion.
Both the EU and the US have warned Beijing against any backing for Russia’s war or help for Moscow to dodge Western sanctions, that would result in damaged ties.
According to the Centre for Research on Energy and Clean Air think tank, Moscow’s revenue from fossil fuel exports in the first 100 days of Russia’s invasion of Ukraine was around $100bn, approximately $59bn (61%) of which came from crude exports to the European Union.
Over the past 12 months, oil prices have risen by more than 60% with the international benchmark crude topping $112 a barrel as of Monday.
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