China Stocks Up on Discounted Russian Crude

As the West isolates Russia amid the war in Ukraine, China jumps in on the opportunity for cheap energy.
Jun. 21, 2022 19:05
China Stocks Up on Discounted Russian Crude

(CapitalWatch, June 21, St. Petersburg) Last month, Russia surpassed Saudi Arabia as China's main crude oil supplier as Western nations shun the imports amid the ongoing war in Ukraine.

May purchases of Russian oil amounted to nearly $7.5 billion, that's $1 billion more than in April, according to Chinese customs data. By the ton, crude imports from Russia increased 55% year-over-year to 8.42 million tons. Russian LNG volume to China grew 56% to nearly 400,000 tons even as the nation has lowered its overall purchases.

Including other imports, China has bought $10.27 billion worth of Russian goods in May – that's an 80% surge compared with a year ago. Imports of refined nickel, aluminum, wheat, and coal declined, while refined copper and palladium sales rose.

Thus, China has shown it continues to support Moscow, though it's been cautious to avoid voicing official support and kept the neutral ground. The biggest market for Russia's crude since 2016, China's refiners took advantage of slashed prices as Western nations scale back their purchases of Russian oil under unprecedented sanctions.

The data on Monday came four months into Russia's invasion of Ukraine. President Xi Jinping has refused to condemn Putin's aggression in Ukraine but has pledged hundreds of thousands of dollars in humanitarian aid to the latter. More recently, Xi and Putin pledged continued cooperation and support for each other's core interests in a telephone conversation last Wednesday.

Another big buyer of Russian energy has been India. In April, India bought $1.3 billion worth of Russian oil; total imports jumped 3.5 times year-over-year to $2.3 billion and included coal, soybean and sunflower oil, fertilizers, and non-industrial diamonds. Russia was India's fourth-largest supplier of crude after Iraq, Saudi Arabia, and the United Arab Emirates (UAE) – up from its seventh position a year ago.