Commodity Exports: Russia Now China’s Largest Oil Supplier

Russia is ousting Saudi Arabia as the main oil exporter of the People’s Republic of China. With heavy price reductions, Moscow ensures that Russian oil finds buyers there and also in India.

Russia sold more oil to China in May than ever before. China imported nearly 8.42 million tons of crude oil from Russia last month, Beijing Customs officials said on Monday. That’s almost two million barrels per day (bpd), 55 percent more than a year ago and about a quarter more than in April.

Russia has thus risen to become the largest oil supplier in the People’s Republic and, after 19 months, has again ousted Saudi Arabia to become China’s largest oil supplier.

China is Russia’s most important trading partner.

Chinese companies such as the refinery giant Sinopec benefited from sharp price reductions after western oil companies and trading houses withdrew from the Russian market due to sanctions imposed because of the Ukraine war. China has so far refused to condemn Russia’s war of aggression against Ukraine. Instead, Beijing criticized Western sanctions against Moscow and Western arms supplies to Ukraine.

A few days ago, Russia and China agreed to intensify their economic cooperation. China is Russia’s most important trading partner. According to Chinese customs, the trade volume between the two countries reached 147 billion dollars in 2021. It has increased by more than 30 percent since 2019.

Saudi Arabia falls behind

Saudi Arabia delivered 7.82 million tons or 1.84 million barrels of oil to China in May, nine percent more oil than in the previous year. However, this is a drop of around 15 percent from April’s 2.17 million barrels per day.

In May, the European Union decided to largely ban imports of Russian oil. However, this only applies to transports with oil tankers by sea. Pipeline oil was excluded from the embargo at the urging of Hungary in particular. The EU embargo should also take effect with transition periods.

Chinese imports of liquefied natural gas (LNG) from Russia are also increasing rapidly. According to customs data, they rose to almost 400,000 tons in May – an increase of 56 percent compared to the same month last year.

Increasing demand from India

The latest data shows that Russia, despite Western sanctions, is still able to find buyers for its raw materials on the world market – if it accepts discounts. In India, meanwhile, Russia rose to second place as oil supplier in May, beating Saudi Arabia to third place, the news outlet reports Reuters reported. Iraq remains India’s most important supplier.

Indian refiners, previously wary of the high cost of transporting Russian oil, are now turning to the price discounts. According to Indian government data, the Reuters are quoted, the value of Indian oil imports from Russia rose more than 31-fold to 2.22 billion dollars within a year. Russian oils accounted for about 16.5 percent of total Indian imports in May. Imports of Russian coal have also multiplied.