While China’s oil and gas imports from Gulf nations plunged in April amid the Strait of Hormuz crisis during the US-Israeli war on Iran, shipments from Russia have provided Beijing with a partial buffer for its growing economy.
Russia’s crude shipments to China rose 11.3 per cent year on year to nearly 9 million tonnes in April, according to Chinese customs data released on Wednesday.
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But market conditions have also shifted. Much of the discount on Russian oil and gas – long a source of cheap energy for Beijing – has shrunk following the prolonged closure of the Strait of Hormuz.
Month on month, the value of China’s crude imports from Russia rose 16.2 per cent in April in US dollar terms, despite a 10.8 per cent fall in quantity.
Global demand for Russian barrels has surged after the United States introduced temporary sanctions waivers for oil already loaded onto tankers in a bid to stabilise global energy markets. On Monday, Washington announced another 30-day extension of the waiver.
The additional demand has intensified competition for available Russian supply, with more buyers now chasing the same barrels.
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“Russia’s oil is trading at prices similar to Brent, even with the discount,” said Chim Lee, senior analyst at the Economist Intelligence Unit.