Russia becomes the largest oil supplier to China

A quiet Russia-Saudi oil war has broken out over the China market, with implications for the geostrategic relations among the U.S., Russia, and China.  Russia had already exported more oil to China three months running early last year.  It’s now evident that the trend continued for the remainder of the year.

Bloomberg News reports that Russia has taken the title for top oil exporter to China for 2016.

Russia boosted crude supply to the Asian nation by 24 percent from 2015 to 52.5 million metric tons, or 1.05 million barrels per day, according to data released Monday by the General Administration of Customs.  The Middle Eastern kingdom became the second-biggest supplier, shipping 51 million tons, or 1.02 million barrels per day, little changed from a year earlier.

China’s high demand for petroleum can be attributed to the rise of “teapots,” which are smaller independent refineries, and to the requirement of stocking the country’s strategic reserve.  Russia’s other advantage is its proximity to Qingdao, where teapots usually receive their shipments.  The port of Kozmino, which is about 50 miles east of Vladivostok, is the terminal point of the Eastern Siberia-Pacific Meridian Pipeline.  This provides access for Siberian crude not only to China, but to Korea and Japan.

Port of Kozmino.

It’s estimated that the teapots’ growth will continue in 2017.  This and the planned expansion of the Sino-Russian pipeline bodes well for Russia to again dominate the China market this year.

President Trump’s potential efforts to constrain China’s expansionist military posture may run into the growing energy dependence of China on Russia.

John Smith is the pen name of a former U.S. intelligence officer.