Russia supplying majority of oil to China
Russia has become China’s biggest supplier of oil as the country sold discounted crude to Beijing amid sanctions over the Ukraine war.
This comes in the wake of a February meeting where the two countries said their friendship had “no limits”.
Encouraged by lower prices, Chinese firms have ramped up purchases of Russian oil this year.
Official figures show that imports of Russian oil rose by 55 per cent from a year earlier to a record level in May.
The imports, which include supplies pumped through the East Siberia Pacific Ocean pipeline and shipments by sea from Russia’s European and Far Eastern ports, totalled nearly 8.42m tonnes last month, according to data from the Chinese General Administration of Customs.
That pushed Saudi Arabia – formerly China’s biggest source of crude oil – into second place with 7.82m tonnes.
Chinese companies, including state refining giant Sinopec and state-run Zhenhua Oil, have increased their purchases of Russian crude in recent months after being offered heavy discounts as buyers in Europe and the US shunned Russian energy in line with sanctions over its war on Ukraine.
In March, the US and UK said they would ban Russian oil, while the European Union has been working towards ending its reliance on Russian gas, as the West steps up the economic response to the invasion of Ukraine.
At the time, US President Joe Biden said the move targeted “the main artery of Russia’s economy”.
Energy exports are a vital source of revenue for Russia but the move is also likely to impact Western consumers.
Last week, a report by the Centre for Research on Energy and Clean Air think tank said Russia earned almost $100b in revenue from fossil fuel exports in the first 100 days of the country’s invasion of Ukraine, despite a fall in exports in May.
The European Union made up 61 per cent of these imports, worth approximately $59b.
Overall, exports of Russian oil and gas are falling and Moscow’s revenue from energy sales has also declined from a peak of well over $1b a day in March.
But revenues still exceeded the cost of the Ukraine war during the first 100 days – with the CREA estimating that Russia is spending around $876m per day on the invasion.
Monday’s figures also showed that China imported 260 000 tonnes of Iranian crude oil last month, its third shipment of Iran oil since last December.
China has continued to buy Iranian oil despite US sanctions on Tehran. (BBC)