- The war in Ukraine is generating gigantic expenses for Russia and its finances are no longer what they used to be. The conflict is spreading further than expected.
- One of Russia’s greatest needs is to find markets to sell its raw materials, especially oil, something that China needs to sustain its growth after the pandemic.
- China can get cheap oil in Russia since, without the Western markets at full capacity due to the boycott, China would be the only alternative.
China is ready to partner even more with Russia in terms of energy, the goal being to “ensure energy security worldwide”, as President Xi Jinping said a few days ago.
The statements came at the same time as the G7 intergovernmental political forum seeks to implement new measures on oil exports from Russia.
China Central Television reported a summary of the President’s remarks, which were made through a message as part of the Fourth China-Russia Energy Forum.
“China is ready for a greater energy partnership with Russia, promoting the development of renewable energy and jointly ensuring global energy security and the stability of the industry’s supply chain,” Xi said, according to the Asian giant’s state broadcaster.
The meeting, which included all major energy companies from the two countries in question, came as the G7 prepared to impose a price cap on Russia’s oil from December, intended to weaken Moscow’s ability to finance its war against Ukraine.
China and Russia, oil supply and demand alliances
Russian energy exports to China increased in value by about 65 percent in 2022, and another 10 percent in volume, Alexander Novak, Russia’s deputy prime minister, said.
In recent months, Moscow became the 4th largest yuan trading center worldwide, as the Russian government seeks to increase its ties with Asia amid sanctions imposed by the West.
Bilateral trade between the two countries would be between $180 billion and $190 billion by 2022, according to Igor Sechin, CEO of Russia’s largest government-owned oil company, Rosneft.
His company is responsible for supplying about 7 percent of China’s crude oil.
The Vostok Oil global energy project led by the Russian state oil company, which combines oil wells that are already operating and those that will begin extracting crude later this decade, “ensures long-term energy supplies to Asian countries,” Sechin said, which would help in the quest to avoid price instability.
By way of response to the G7 project to impose a price cap on Russian oil, the Russian government promised to divert supplies to countries that are against the proposal, and China and India have already increased their oil purchases from Moscow.
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