China’s oil imports increase to a record, Russia cuts gas to Finland
The move by the world’s largest oil importer comes a month after the country initially cut Russia’s supply over fears of openly backing Moscow and potentially exposing major Chinese oil companies. subject to sanctions.
China’s seaborne oil imports rose to a record 1.1 million bpd in May, up from 750,000 bpd in May, according to estimates by energy analytics provider Vortexa Analytics. in the first quarter of 2022 and 800,000 bpd in 2021.
Unipec, the commercial arm of Asia’s top refiner Sinopec Corp, is leading the purchase, along with Zhenhua Oil, a unit of China’s Norinco defense group. Hong Kong-registered Livna Shipping also recently emerged as a major carrier of Russian oil to China. However, Sinopec, Zhenhua and Livna declined to comment on the matter.
Oil tankers at a port in Nantong City, Jiangsu Province, China. Photo: Reuters
According to Reuters news agency, the United States, Britain and a number of other important customers banned Russian oil imports shortly after Russia launched a military operation in Ukraine. The European Union (EU) is in the process of finalizing a new round of sanctions including a ban on oil purchases from Russia.
Many European refineries have stopped buying from Russia for fear of violating sanctions. Vitol and Trafigura, the world’s two largest commodity exchanges, have also stopped buying from Rosneft, Russia’s largest oil producer.
The decline in Russian oil prices by about $29 a barrel compared to before the military campaign in Ukraine has benefited Chinese refiners as they face shrinking profit margins amid the backdrop of the economy. economic growth slowed down. Prices are much lower than competitive prices from Middle East, Africa, Europe and America.
Under the government agreement, China receives about 800,000 bpd of oil from Russia via pipeline, bringing May imports to nearly 2 million bpd, accounting for 15 percent of China’s total demand. For Russia, oil sales to China are helping its economy to avoid the impact of sanctions from the West.
In another development, Russian gas corporation Gazprom announced to stop supplying gas to Finland from May 21 after the Nordic country refused to pay in rubles.
The Finnish energy company Gasum said on May 20 that the Russian gas company had announced it would stop supplying gas to Finland from 7 a.m. (local time) on May 21. Before Finland, Poland and Bulgaria also had their contracts cut at the end of April for not paying in rubles. Most of the gas consumed in Finland is imported from Russia, but this fuel only accounts for about 5% of the Nordic country’s total annual energy consumption.
Gasum said it will continue to supply gas to domestic customers from other sources through the Balticconnector gas pipeline connecting Finland with Estonia.
Tensions between Russia and Finland escalated after the Nordic country officially announced its intention to join NATO, abandoning decades of neutrality and ignoring Russian threats.
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