Scan to Download ios&Android APP

Russia becomes China’s biggest oil supplier, replacing the Saudis at the top

17:38, 20 June 2022

Share this article

What You Need to Know

The week ahead update on major market events in your inbox every week. Subscribe
Flags of China and Russia.
Russian oil exports to China surged 55% in May - Photo: Getty Images

Russia has ousted Saudi Arabia as the biggest oil supplier to China.

The Federation shipped a record amount of crude to the world’s second-largest economy in May, with Chinese customs data showing a massive 55% year-over-year increase in shipments last month.

Russia sold about 8.42 million tonnes of crude oil to China in May, according to 20 June data published by China’s General Administration of Customs, suggesting that Moscow is managing to find buyers for its discounted energy products.

Brent oil

Official data also showed that China bought crude oil from Iran in May and that it did not make any oil purchases in Venezuela.

Stronger Russia-China bond

Based on the average of March to May 2022, Russian exports of its Urals crude oil variant to the Asian nation surged 205% when compared to 2021’s levels, Rystad Energy research published on Monday showed.

“In any case I expect increases, but much more moderate ones, through this year,” said Lauri Myllyvirta, the lead analyst at Finland-based Centre for Research on Energy and Clean Air (CREA).

“China is already buying essentially as much as Russia can ship to the Pacific and (also move) directly to China through pipelines, so increasing imports in the short term would mean very long trips for tankers,” he wrote on Twitter. Oil reaches China by sea and via the East Siberia Pacific Ocean pipeline.

Last week, Chinese President Xi Jinping told his Russian counterpart Vladimir Putin that Beijing will back Moscow on "sovereignty and security," said an AFP report. It was the second reported call between the leaders since the start of the war in Ukraine.

Fossil fuels fill the war chest

Fossil fuel exports are “filling (the) Kremlin’s war chest,” stated a CREA report published on 12 June.

What is your sentiment on Oil - Brent?

Vote to see Traders sentiment!

Moscow earned EUR93bn ($97.7bn /  GBP79.8bn) in revenue from fossil fuel exports during the first 100 days of the war in Ukraine (from 24 February to 3 June). Sixty-one percent of those exports, worth some EUR57bn, found their way to the European Union (EU), the report noted.

Russian energy companies have increased sales to China, the world's biggest buyer of oil, after the EU agreed to ban 90% of the bloc's purchases of the Federation’s crude and related products. This ban will be implemented over the next six to eight months.

Beijing is Moscow's largest trading partner with trade volumes hitting $147bn in 2021, per Chinese customs data, up more than 30% on 2019.


Read more

What You Need to Know

The week ahead update on major market events in your inbox every week. Subscribe
The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 427.000+ traders worldwide that chose to trade with

1. Create & verify your account

2. Make your first deposit

3. You’re all set. Start trading