Russia And China’s Growing Energy Relationship
Russia’s economic freefall and isolation from the West has made it increasingly eager to build its relationship with China, even at the cost of lost leverage with Beijing.
But new economic data from China shows that Russia has succeeded in capturing a larger share of the massive – and growing – Chinese oil import market. China’s imports of Russian oil skyrocketed by 36 percent in 2014. The rapid rise in Russian oil exports to China is displacing other sources, such as Saudi Arabia and other OPEC members. The Wall Street Journal reports that China’s oil imports from Saudi Arabia fell 8 percent in 2014, and imports from Venezuela fell 11 percent.
The data suggests that Russia and China are finally forging closer trade ties based on energy. They share a massive border, but have been unable to capitalize on what has long appeared to be a well-matched economic opportunity – Russia is a huge energy producer and China is the world’s largest importer of petroleum products. Historic animosity and mutual suspicion had long left a major deal off the table.
The sticking point had been price. Years of negotiations over major natural gas trade stalled as each side held out for more favorable terms.
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