FX.co ★ China reduces oil supplies from Russia

China, which is considered to be Russia’s reliable ally, is gradually reducing crude oil supplies from Russia. It is the least appropriate time for the country dependent on energy resources exports. Behind the bald statements about eternal friendship between Russia and China, there are complicated and rather unfavorable relations. China is trying to settle in Siberia step by step and Russia has actually allocated land to China in exchange for prospects of further cooperation. The Power of Siberia project not so long ago was called the largest project in history of the oil and gas industry but it remains the largest one just on paper. However, this is not the worst thing. Although the future deals are important, it is necessary to consider the existing cooperation schemes. There are some pitfalls in that. China has drastically cut the imports of black gold from Russia. It is worth mentioning, that China is the largest oil importing country in the world, so the slightest decline in Chinese demand is a serious problem. The global oil prices slump and Russian gas being edged out from the market may result in grave consequences for Russia because revenue(s) from oil and gas exports forms a great part of its budget. However, despite close friendship, China instead of supporting Russian oil producers opted for their main competitors from Saudi Arabia. Only previous month, the shipments of oil from Saudi Arabia grew by 0.8% and amounted to almost 4 million tons. Russia exported 3.41 million tons of crude that is 16% lower. Even Angola managed to increase the volume of shipments by 27% up to 3.64 million tons.