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Despite the sanctions imposed on Russia following the attack on Ukraine, its most important export commodity is still flowing abroad unchecked. Europe also continues to purchase crude oil from Russia. However, while the EU wants to reduce its imports by 90 percent, China has now positioned itself as the most important buyer. In the spring, the country purchased around 1.6 million barrels of crude oil from Russia every day – and at hefty discounts, as Christiane Kuehl explains. With these imports, China primarily wants to replenish its strategic oil reserves. Once again, Beijing exploits global turmoil to its own advantage.
At the Summit of the Americas in Los Angeles, US President Joe Biden actually wanted to show the unity between the United States and Latin America. Instead, the summit became proof of the US loss of power in the region – a loss that China in particular exploits and accelerates with targeted investments, as Frank Sieren writes. Not only is the People’s Republic the largest trading partner of Latin American countries, but it has also already incorporated many of them into Chinese-influenced institutions such as the Asian Infrastructure Investment Bank and the Belt and Road Initiative. Common positions with the US, such as a joint condemnation of Russia’s attack on Ukraine, will thus be even more difficult, as the summit’s thin final paper proves.
Fabian Peltsch
Feature
More Russian oil for China
Russia sells less oil to the EU and the USA. But the black gold is still flowing unchecked elsewhere. According to Russian statistics, the export volume, which initially collapsed as a result of the US embargo, has now returned to pre-war levels. President Vladimir Putin has Asia to thank for this: According to S&P Global, India imported around 20 times as much oil per day from Russia in April as the daily average for 2021 – at discount prices of up to $30 below global market prices (627,000 barrels per day). And China, too, after its initial reluctance, now seems to be negotiating more intensively with Russia about oil supplies – and at hefty discounts, too.
China buys Russian crude oil at a 35 percent discount from the current market price, Bloomberg recently reported, citing EU Trade Commissioner Valdis Dombrovskis. “What we are seeing, especially in this situation of Russia’s weakness, is that China is going to take good advantage of it,” Dombrovskis said. It would be less beneficial for Russia. Reuters reports about new oil contracts by various refiners, signed quietly behind the scenes.
China and India grab Russian oil supplies
China apparently does not want to make a big fuss about Moscow’s oil purchases, although there is currently no threat of secondary sanctions. The EU has also continued to buy Russian oil. It is possible that China is also trying out the balancing act between supporting Moscow and apparent neutrality in this field – in this case with a nice benefit for itself.
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