As effects of the Western sanctions on Russian oil kick in and Western buyers shun or banned imports of many Russian energy products, reports said yesterday that China’s imports of oil, pipeline gas, LNG, and coal from Russia have hit a total of $68 billion since the Russian invasion of Ukraine.
During the same period last year, the figure stood at $41 billion. A report compiled by Bloomberg said Western buyers are either shunning, or have banned imports of many Russian energy products.
The report said China’s imports of LNG from Russia surged to a record in November although overall Chinese LNG purchases were down by 5.4% year over year, per Chinese customs data cited by the agency.
Chinese imports of LNG from Russia doubled to 852,000 tons in November compared to the same month in 2021. Oil imports from Russia also jumped last month, by 17%, and Russia beat Saudi Arabia to be China’s top oil supplier in November, according to the data.
Chinese imports of Russian coal surged by 41%, doubling from November 2021, although they were off the record high from September this year.
Early this week, there were reports that many independent Chinese refiners based in the Shandong province have continued to buy Russian crude and are ignoring the price cap imposed by Western countries.
The price cap on Russian crude imposed by the EU, the G7, and Australia came into effect on December 5, but China hasn’t joined the so-called Price Cap Coalition, which bans maritime transportation services for Russian crude oil unless the oil is sold at or below $60 per barrel.
On the other hand, independent Chinese refiners have seen their refining margins jump in recent weeks as they are able to negotiate steeper discounts for their preferred Russian crude grade, even if they buy it above the price cap, trading and industry sources told Reuters on Tuesday.
The flow of cheaper Russian crude to China lifted the refining margins of the independent refiners, the so-called teapots, to above $115 (800 Chinese yuan) per ton last week, from less than $86 (600 yuan) at the beginning of December, according to a China-based oil analyst who spoke to Reuters.
By Bosco Agba