Russia overtook Saudi Arabia as China’s top oil supplier in the first two months of 2023, according to Chinese government data, in another sign of the rewiring of global energy trade.
China imported 1.94 million barrels per day (bpd) from Russia, while Saudi crude oil imports were 1.72 million bpd in the same period. Inflows from Russia rose 23 percent, while flows from Saudi Arabia slipped to their lowest level since June, down 29 percent from January.
The global oil trade has experienced a revival amid Russia’s invasion of Ukraine. Last year, the EU and the UK banned the import of Russian crude oil. They continued in February with a ban on Russian petroleum products, such as fuel oil. These measures coincided with the roll-out of a price ceiling by the G-7 countries on Russian oil and related products.
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The measures, designed to keep Russian oil on the market to avoid a price rise and limit Moscow’s ability to profit from the sales, have shifted trade flows.
China and India have emerged as major buyers of Russian crude oil, cutting into the Gulf countries’ market share in Asia. Meanwhile, the Gulf states are redirecting their sales to Europe, where Russia has long been the main energy supplier.
The changing trade flows have potential geopolitical implications, analysts say.
‘Saudi customer service’
The Gulf powers have emerged back into the center of the global debate over energy security, with Europe and the US courting countries such as Qatar and Saudi Arabia to help replace Russian energy.
“The tables have turned on Putin. His isolation was the re-entry of Mohammed Bin Salman on the world stage,” Kristian Coates Ulrichsen, a political scientist at the Baker Institute of Rice University, previously told MEE.
The Crown Prince of Saudi Arabia, Mohammed Bin Salman, has been shunned in the West, following the murder of Middle East Eye and Washington Post columnist Jamal Khashoggi. However, he met US President Joe Biden in Saudi Arabia and traveled in Europe.
China remains the largest buyer of oil from the Gulf states. In 2021, China imported $43.9bn worth of crude from Saudi Arabia, accounting for more than a quarter of the kingdom’s total crude oil imports.
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Analysts have pointed to China’s recent diplomatic assistance in the region, negotiating a reconciliation between Saudi Arabia and Iran, as a sign that its economic footprint is asking it to flex its geopolitical muscles.
Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, previously told MEE that Saudi Arabia responded to China’s intervention in part because of the economic ties.
“The agreement with Iran is customer service for the Saudis,” she said previously. “China is their most important customer and they want to be responsible for Chinese requests.”
Russia and China have also deepened ties after the invasion of Ukraine.
Chinese leader Xi Jinping met with Russian President Vladimir Putin on Tuesday in Moscow. The US has said that China is considering supplying Russia with weapons. The two countries are also discussing a pipeline that would reroute Russian gas exports from Europe to Asia.
