Beijing exploits Ukraine war to bargin oil from Moscow
A challenge to Western sanctions on Russia over attack on Kiev. Russian crude oil purchases by China jumped 40% between January to May. The Chinese pay less per barrel than Europeans. With the ongoing economic crisis, it is difficult to say whether Beijing will be able to compensate for the EU's lack of Russian oil purchases.
Beijing (AsiaNews) - China is buying more oil from Russia and doing so by exploiting the effects of the war in Ukraine. Restrictions on Russian crude imports adopted by the United States, the European Union and their allies have reduced the pool of buyers, forcing Moscow to charge lower prices for partners such as Beijing and India.
According to financial data provider Refinitiv, last month the Chinese bought 800,000 barrels per day of Russian crude oil transported by sea: an increase of 40% compared to January. For China this is a change of direction, after an initial phase in which it seemed careful not to violate the punitive measures imposed by the West on the Kremlin. The US and EU have repeatedly said that there will be consequences if Beijing helps the Russians to circumvent the sanctions.
China, like other Asian countries, can buy Russian oil at a price between and per barrel, well below the 5 of Brent, the international benchmark used in the European market. The discounts are not hurting Moscow for the time being, as the cost of its crude oil has in any case risen by 30% since the beginning of the year. Calculations by the International Energy Agency show that from January to April, Russian revenues from oil sales grew by 50%. And the same applies to coal exports.
The Russians can also count on trade triangulations to overcome Western bans and sell 'indirectly' in the EU. It remains to be seen whether with these stratagems, and with the help of China, India and other developing countries, Russia will be able to make up the losses from the lucrative European market.
Within the next 6-8 months the EU has promised to cut Russian oil imports by 90%. In 2021 Russia sold more than half of its crude oil exports to Europe: 2.2 million barrels per day to EU countries, to which 1.2 million barrels per day of refined products must be added. A 10% export to the US must also be considered in the calculation.
China's share of Russian oil exports was 22%. Overall, China imported 1.7 million barrels per day from Russia in May. Covering the European share seems difficult, even with the expansion of the port of Kozmino in the Russian Far East. Much will depend on China's ability to recover from the recent waves of Covid-19 and related lockdowns, which have dealt a severe blow to the national economy.