Russia has surpassed Saudi Arabia as China’s largest supplier of crude oil, reaching a new export record in May, according to news agency Reuters.
According to the news agency, China imported roughly 55% more oil from Russia in 2018 than it had the previous year, surpassing Saudi Arabia for the first time in five months. According to Markets Insider, following sanctions and international boycotts, Russia has reduced prices on its oil dramatically.
“China is already purchasing practically everything that Russia can sell via pipelines and Pacific ports,” Lauri Myllyvirta, told Stars and Stripes.
In May, China imported 1.98 million barrels a day, according to Reuters. Iran’s oil shipments to China rose 12% in May 2021 compared to the same period last year.
In May, Russia surpassed Saudi Arabia in oil exports to India, according to Markets Insider. Despite lower prices, China and India now make up half of Russia’s seaborne oil crude imports, keeping earnings high even with decreased prices.
Oil shipments from Russia to Europe have risen gradually in recent months, despite the country’s cuts in natural gas production and international anger over the invasion of Ukraine, according to Bloomberg. Many Western nations, including the United States, have punitively imposed sanctions on prominent Russian oil players, according to the Treasury Department.
Experts caution, though, that sanctions may be beneficial to the Russian economy in the long run by enhancing trade ties with other countries outside of the West. Despite a debt default caused by sanctions that prevented Russia from repaying its loans, the financial system has remained stable, according to experts.
According to a Bloomberg Economics report, Russian oil and gas revenues are expected to grow 20% over 2021 to $285 billion in 2022.
China’s oil imports have grown dramatically as a result of falling prices, but energy is becoming more expensive in the United States and the economy is on the verge of recession. On Monday, according to reports, the Biden administration considered lifting tariffs on certain Chinese goods to offset rising costs across the board.
In September, the United States expressed a desire for friendly economic ties with China.
“I am personally confident that robust commercial engagement will help to mitigate any potential issues,” Commerce Secretary Gina Raimondo told The Wall Street Journal.