China sharply increases Russian gas imports, EU prepares to ban Moscow oil

Sheet South China Morning Post On May 2, citing a report by Russian state gas corporation Gazprom, the amount of natural gas exported to China from January 1 to April 2022 increased by 60% compared to the same period last year.

Meanwhile, the amount of gas Gazprom sold to countries outside the Commonwealth of Independent States (the group of Eastern European and Central Asian countries that were once members of the Soviet Union and now maintain close relations with Russia) decreased by 26.9 % over the same period, down to 50.1 billion m³.

Gas pipeline from Russia to China Reuters

Russia exports natural gas to China through the Power of Siberia pipeline, operating since 2019. In 2020, about 4.1 billion m3³ passes through this pipeline and Gazprom aims to reach a maximum capacity of 38 billion m³ in 2025.

In February, before Russia started the campaign military in Ukraine, President Vladimir Putin visited China and signed an oil and gas contract worth an estimated 117.5 billion USD, including the agreement of Gazprom to supply 10 billion m3 of oil.³ gas each year through the Power of Siberia 2 pipeline, which connects Sakhalin Island in the Far East to Heilongjiang Province in northeastern China. The pipeline is expected to be operational before 2026.

Russia is also contemplating building a Soyuz Vostok pipeline running from Russia through Mongolia and China. Once completed, the total amount gas Russia’s exports to China each year can reach 98 billion m³.

While China insists on continuing trade ties with Russia and opposes sanctions, the West is seeking to reduce its energy dependence on Moscow.

The European Union (EU) is said to be planning to ban oil imports from Russia this year. 26% of the EU’s oil imports come from Russia, although the levels vary from country to country.

Some European officials said the EU could exempt Slovakia and Hungary from the above sanctions because the two countries depend heavily on oil from Russia. Hungary has vowed to protest if the order embargo to be announced. According to Reuters, Slovakia imports 96% and Hungary imports 58% of its oil and petroleum products from Russia in 2021.

Last year, Germany also imported 35% of its crude oil from Russia but in recent weeks it has dropped to 12%. Economy Minister Robert Habeck said on May 2 that Germany will overcome difficulties even if the EU imposes an embargo and causes a shortage of oil.

An adviser to the German chancellor, Joerg Kukies, said on May 1 that Germany supported a ban on Russian oil but needed a few more months to find an alternative source.

On the other hand, the EWI Energy Research Institute (Germany) warned on May 2 that Germany should limit the use of gas, even if supply from Russia is continuing, to prepare for the risk of a supply cut by Moscow. Recently, Russia cut off gas supplies to Poland and Bulgaria because these two countries refused to pay in rubles.