An inspection officer checks a tanker carrying imported crude oil at Qingdao port in China's eastern Shandong province, May 2022 (Photo: AFP)
Dániel Kovács
22/02/2023 05:00
China has been increasing its purchases of Russian energy carriers at such a pace that imports in May already reached USD 7.47 billion, one billion more than in April and double year-on-year. Within this, crude oil imports also rose by more than 50 per cent in a year, making Russia China's top oil exporter, ahead of Saudi Arabia.
With Russian oil significantly cheaper than the world price, leading importers such as refinery operator Sinopec and trader ZhenhuaOil are reaping the benefits. Sanctions imposed by the West have not affected China before, and years ago Beijing purchased, and in fact also resold large quantities of Iranian oil.
India, alongside China, is not willing to miss out on cheap Russian oil either and has significantly increased its share of Russian seaborne oil exports, becoming Russia's second most important buyer, with up to 576,000 barrels per day in the first weeks of June.
Although not a huge leap in terms of volume, Turkey has also more than doubled its imports of Russian oil to 260,000 barrels per day, compared to less than 100,000 barrels per day in the same period in 2021. Russian oil has also become more popular in Azerbaijan, while imports from Norway, Iraq and West Africa have been reduced.
Even oil-rich Saudi Arabia imports from Russia, buying a significant amount of fuel oil between April and June this year, nearly 550,000 tonnes, which was shipped to the Gulf kingdom via Russian and Estonian ports. Saudi Arabia still has a number of oil-fired power plants, and thermal power plants that use evaporation technology to produce fresh water from salt water, which is also heated with oil.
Consequently, Russian imports are not threatened with a shutdown for the time being, even though the Western world is choking on high energy prices, while on the other side of the world imports from countries under sanctions are driving prices down. Iran has entered the price race, undercutting the already cheap Russian oil, which has been reflected in falling Russian sales in August.
If the European Union's boycott of Russian seaborne oil imports goes into effect on 5 December under the current conditions, the world oil price is likely to spike, putting Moscow back in the driving seat.