China, to the aid of Russia with the purchase of (much) more oil

BeijingBeijing has become a kind of lifeline for Moscow. Russia finds in China an ally that helps compensate for the loss of sales in Europe due to the sanctions imposed in response to the invasion of Ukraine. “The alliance without limits” announced by the Chinese president, Xi Jinping, and his Russian counterpart, Vladimir Putin, last February remains in force. Although the Asian giant is careful and tries to prevent its companies from being retaliated against to evade sanctions, it has not hesitated to increase purchases in Moscow.

The figures are relevant. Russia has become the main oil supplier in China, ahead of Saudi Arabia. According to data published this week by Chinese customs, Russian oil imports soared 55% in May compared to the same period last year. The Asian giant received about 8.42 million tons of crude this month through the East Siberian pipeline and the Pacific Ocean, and also through maritime shipments. It’s almost two million barrels a day. Chinese state-owned companies Sinopec and Zhenhua Oil are the main buyers. The statistics also show how Russian liquefied gas imports increased by 56% compared to May 2021.

The fact is that Beijing is increasing purchases of Russian oil despite the fact that demand has fallen due to the stoppage of activity caused by the restrictions of the covid zero policy. That is why it is easy to think that the Chinese government is weakening good relations with Putin despite the slowdown in its economy. But without forgetting that Beijing is doing a good business: Russia has been forced to offer large discounts to encourage oil sales due to the risks associated with the sanctions imposed.

The second economy in the world is the main importer of oil on the planet. Despite the sanctions on Iran, Beijing has also continued to buy crude from third countries, such as Malaysia. Instead, it remains cautious with Venezuela to avoid US sanctions and, officially, since 2019 it has ceased to be one of its suppliers.

Aligned with Moscow

China has made unequivocal gestures of support for Russia despite the international wear it causes. At no time has he condemned the invasion of Ukraine, which he continues to officially describe as a “special military operation.” He has subscribed to Putin’s thesis of blaming NATO for the conflict because it is a threat to Russia. In a recent telephone conversation between Xi Jinping and Vladimir Putin, the Chinese leader assured that he would continue to support Moscow in matters of “sovereignty” and “security”.

Xi Jinping has also defended in his meetings with the European Union or the United States the need to seek a negotiated solution to end the conflict and has criticized sending weapons to Ukraine alleging that it will only prolong the war. And, of course, Chinese diplomats have not supported UN resolutions condemning Moscow for the invasion.

China and Russia maintain their alliance and collaboration. It is a tune that has been visualized in the virtual meeting of the BRICS (Brazil, Russia, India, China and South Africa) this Thursday and Friday. Xi Jinping criticized in an opening speech “the expansion of military alliances” in a clear allusion to the United States and NATO.

BRICS complicity

The meeting has allowed the return of Vladimir Putin, although virtually, in an international forum. The Russian president claimed to strengthen ties between the BRICS countries in the face of sanctions. He also welcomed the possible opening of Indian retail chains in Russia and other future investments. Putin even proposed creating a new international reserve currency to reduce dependence on the dollar and the euro, along with alternative international transfer mechanisms. In this way the isolation of the Russian Central Bank would be overcome.

And it is that as the West has intensified pressure against Russia for the invasion of Ukraine, Putin is looking for new markets in Asia to curb losses. Apart from China, the other big buyer of Russian oil is India. Prime Minister Narendra Modi’s government has gone from buying almost nothing from Moscow to importing more than 760,000 barrels a day in May. And, incidentally, benefit from lower prices. According to the International Energy Agency, in the last two months India has already overtaken Germany as the second largest importer of Russian crude.

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