Beijing cannot buy all of Russia's unsold gas in Europe
The Chinese have doubled their purchases from Russia, but the values are far from those in Europe. The EU and Britain have reduced imports of Russian hydrocarbons in response to Putin's war in Ukraine. The Kremlin has similar problems with oil sales.
Beijing (AsiaNews) - China doubled its purchases of Russian gas last year in monetary terms. Data from the Chinese Bureau of Customs reveal .8 billion in sales compared to .9 billion in 2021, which the Kremlin was able to use to finance the war on Ukraine. Sales, however, remain far from those lost in Europe.
Like the Russian monopolist Gazprom, the Chinese authorities did not specify the volumes bought. The issue is sensitive as Russia is desperately seeking alternative markets to Europe. Due to the aggression in Kiev, the EU and Great Britain have imposed a series of sanctions on the Kremlin and limits on Russian hydrocarbon imports.
Of the total imported in 2022 by the EU countries, the share of gas from Russia fell from 45% in 2021 to 7-8%. Two years ago, the Russians supplied the EU area with 155 billion cubic metres (bcm); the Chinese bought 16.5 bcm.
While China undoubtedly bought larger volumes of Russian gas (at discounted prices) in 2022, indirect calculations show that they cannot cover European demand. According to Gazprom data, exports of the fossil source outside the former Soviet space dropped from 185 bcm in 2021 to around 101.
Two years ago, China imported more than 160 million bcm of gas out of a demand of 372 bcm: when all is said and done, Putin's Russia would have to become the Asian giant's sole gas supplier to cover European losses.
At best, Moscow's supplies to Beijing could reach just under 100 bcm in 2030. By that date, the Power of Siberia, currently the only pipeline bringing Russian gas to China, will be at its maximum potential of 38bcm per annum and perhaps the Kremlin will have completed a second 50bcm Siberian line; liquid natural gas transported by sea from Russia's Sakhalin Peninsula should be added to the two pipelines.
A similar argument applies to Russian oil. With the entry into force next month of a price cap, and the subsequent sales freeze announced in response by the Kremlin, EU purchases of crude from Russia will fall to zero.
China, India, and Turkey together purchase the same amount of Russian oil as the EU countries. However, as noted in Kennan Institute's Russia File, these three countries do so at heavily discounted prices: on average more than less per barrel than the global Brent benchmark.