Page 8 - EurOil Week 25 2022

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China, India overtake Germany as

Russia’s biggest buyer of crude oil

RUSSIA OIL imports by China and India from Russia released this week showed that crude oil imports
have surged thanks to the sanctions on Russia from Russia hit a record level as non-state refin-
in May to overtake Germany as Russia’s biggest ers cashed in on discounted supplies. State-
trade partner. owned refineries have avoided buying Russian
China’s crude oil imports from Russia were oil for fear of being hit by secondary sanctions
up 55% in May compared to a year earlier, as by the US.
the chart shows, displacing Saudi Arabia as the Getting oil to China remains a problem as
country’s top supplier. China imported about Russia attempts to pivot away from the West,
8.42mn tonnes of oil from Russia in May, data where the EU is attempting to cut its supplies
from China’s General Administration of Cus- of Russian oil to zero over the coming years.
toms (GAC) showed against the 7.82mn tonnes Almost all of the oil pipeline infrastructure,
of oil from Saudi Arabia in the same period. much of it built in the 1970s, points west with
China has been Russia’s biggest market for crude only a few newer pipelines running east to the
oil since 2016, reports Aljazeera. Asian markets.
China has been reluctant to become overly The majority of Russian oil deliveries to
dependent on any one country for its oil and Asia are transported by ship. Despite the West’s
has a policy of limiting oil imports from each attempt to prevent Russia using international
supplier to 15%, but with Russian oil trading tankers as part of its sixth package of sanctions,
at a 30% discount to the market prices, this has exemptions given to Greece in particular, which
proved irresistible to those countries that have accounts for half of the tankers used by Russia,
not joined the international sanctions regime. have blown a large hole in the effort to hamper
Both China and India are taking advantage of Russia’s oil exports by sea.
the fire sale in Russian commodities to build up “Why is Putin cutting gas exports to Europe?
their strategic reserves. The West – reluctant to sanction maritime insur-
While Russia has stopped releasing details of ance – has created a monster. The hard currency
its external trade, Chinese customs data for May windfall from the rise in oil prices gives Putin the

P8 www. NEWSBASE .com Week 25 23•June•2022