Russia has overtaken Saudi Arabia as China’s top oil supplier, as Western demand for it has declined.
As per statistics published on Monday by the Chinese General Administration of Customs, Russia has surpassed OPEC heavyweight Saudi Arabia to become China’s largest oil supplier.
According to the data, Russia provided 2.02 million barrels per day to China in May, up from 1.31 million in April. This represents a nearly 30% increase over the previous month and a 55% increase over May 2021. Saudi Arabia has long been China’s largest supplier. It exported 1.88 million barrels per day in May, down 12.5 percent from 2.15 million in April, losing market share in the world’s largest commodity importer to the United Arab Emirates, Russia and Oman. “The anticipation that Russian oil would cease to be traded on international markets has not occurred,” Wei Cheong Ho, vice president of downstream at consultancy Rystad Energy, said. “Although the price of funding such vessels and trades has significantly increased due to their exclusion from the Western financial system,” he said, “the discount on the Urals is too appealing for some refiners to ignore,” he continued.
According to data, in May China imported 1.13 million barrels per day from Iraq, 982,000 barrels per day from the United Arab Emirates, and 956,000 barrels from Oman. According to the data, imports from both the United Arab Emirates and Oman have increased by about one-third since April. China has soared Russian oil at discounted prices, like India after the invasion of Ukraine. Western nations have reduced Russia’s gas and oil imports in an attempt to reduce funding for Moscow’s military aircraft and ultimately put pressure on Putin to end the war. Russia responded by refusing to meet the demand for payments in the ruble and then stopping the supply of natural gas to some European countries. The European Union relies on Russia for about 40% of its natural gas needs but is paving the way for both. The EU is Russia’s largest natural gas customer, accounting for more than 70% of gas exports. Oil sales to China and India are helping to close the demand gap left by Western commodity importers. Russia’s oil export revenues rose 11% to $ 20 billion in May, according to data from the International Energy Agency, and rising energy prices eased the impact of lower exports. This will bring your income back to prewar levels.
Behind Saudi Arabia and the United States, Russia is the third-biggest oil producer in the world, which accounts for around 12% of production globally.
In early March, US and UK have both announced that they would be cutting off oil imports from Russia, even though both the countries have a consumption of 3% and 8% of oil.
However, a much bigger importer, the EU, is also planning to ban oil supplies from Russia. A calculation reveals that this ban would cost Russia $10 million yearly, although Moscow had mentioned they it would go about seeking other importers.
While it has been a tedious struggle for Western nations to search for crude oil or other sources, a barrel’s price has shot more than $120 for a barrel in the current year.
