- Russia beat Saudi Arabia to become China's biggest oil supplier in May, data from Beijing shows.
- Imports of Russian oil to China have risen 55% over the past year.
- China, like India, has been snapping up Russian oil at low prices amid its invasion of Ukraine.
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Russia has vaulted ahead of OPEC heavyweight Saudi Arabia to become China's biggest supplier of oil, according to data released on Monday by the Chinese General Administration of Customs.
Russia supplied 2.02 million barrels per day to China in May, up from 1.31 million in April, the data showed. This is a jump of almost 30% from the previous month, and of 55% from May 2021.
Saudi Arabia has traditionally been China's biggest supplier. It exported 1.88 million barrels per day in May, marking a drop of 12.5% from the 2.15 million in April, forfeiting market share in the world's biggest importer of commodities to Russia, the United Arab Emirates and Oman.
"The expectation that Russian crude would cease to be traded on international markets has not transpired, and instead the steep discount on Russian crude has seen vessels redirected to alternative markets," Wei Cheong Ho, vice president of downstream at consultancy Rystad Energy, said.
"While the cost of financing these vessels and trades has increased significantly due to be freezing out of the Western financial system, the discount on Urals is too attractive for some refiners to ignore," he said.
In May, China imported 1.13 million barrels a day from Iraq, 982,000 barrels a day from the UAE, and 956,000 from Oman, the data shows. Imports from both the UAE and Oman were up by around a third from April, according to the data.
China, like India, has been snapping up Russian oil at discounted prices following the invasion of Ukraine. Western nations have reduced their imports of Russian gas and oil to try cut off funding to for Moscow's military machine and ultimately put pressure on Putin to end to the war.
Russia has responded by halting natural gas supplies to some European countries over their refusal to meet a demand to pay in rubles. The European Union relies on Russia for around 40% of its natural gas needs, but it cuts both ways. The EU is Russia's biggest natural gas customer, accounting for over 70% of its gas exports.
Sales of oil to China and India have helped plug the gap in demand left by Western commodity importers. Russia's oil export revenues in May jumped by 11% to $20 billion, according to data from the International Energy Agency, with soaring energy prices cushioning the blow of falling export levels. This puts the revenues back at their pre-war levels.
Russia is the world's third-biggest oil producer, behind the United States and Saudi Arabia, accounting for about 12% of global production.
But the EU, a much bigger importer, is also banning Russian oil supplies. The EU imports around a quarter of its oil supplies from Russia. Bloomberg calculated the ban could cost Russia around $10 billion per year, though Moscow has said it would find other importers.
With Western nations scrambling to find other sources or crude oil, the price of a barrel has shot above $120 a barrel this year, trading around its expensive in almost a decade, while European natural gas prices have soared to record highs, and are now a full 300% higher than they were at this point in 2021.