Russian Energy: A Dangerous Opportunity For China in the midst of Ukraine War: Experts

The communist leadership of China is looking for ways to boost imports from Russia, including oil and coal. Although the move may help to stabilize China’s energy problems, it could backfire and draw international sanctions against itself.

With Western countries considering tighter sanctions against Russian energy exports, many are wondering how Beijing will react to international anger. It was a topic of discussion for a roundtable of foreign policy experts on July 8 at an event hosted by the Atlantic Council, a foreign-policy-oriented think tank.

With Russia now China’s largest crude oil supplier, the energy relations between both countries are complex. Beijing’s state-owned power companies have suspended certain energy projects in Russia. Despite the obvious trade advantages that Russia continues to be isolated from the rest of the world, many wonder if the Chinese Communist Party might wish to extend the situation.

Russians Face Danger and Opportunities

Erica Downs (senior research fellow at Columbia University’s Center on Global Energy Policy) was one of the speakers at this Atlantic Council event.

“Russia “is one of China’s most important energy suppliers,” Downs stated.

She explained that China is the biggest importer of Russian natural gas and coal and has increased its consumption over the past year, despite Russia’s invasion.

Indeed, the communist regime doubled its liquefied natural gas imports from Russia in February over a year earlier, increasing its imports of Russian oil even as demand fell. Since November of 2021, China, almost 50% of global crude oil imports came from Russia. This trend is not slowing down.

Downs stated that China had multiple motivations. She said that the CCP was trying to profit from lower prices because there is no market in China. On the other hand, it was desperate to increase its energy security after the historic rolling blackouts of last year, which forced them to shut down factories due to lack of power.

Downs stated that land-based pipelines from Russia to China bypassed maritime chokepoints which could have been targeted in case China is sanctioned.

The war in Ukraine offers China a chance, Downs stated.

“It has allowed China to purchase a lot Russian fossil fuels at a cheap .”

Downs pointed out that Russia’s failure to engage with China in other markets meant the war gave the CCP the opportunity to strengthen its relations with Russia. She said that Chinese companies are still cautious about violating international sanctions, despite CCP rhetoric challenging their legitimacy.

Seismic Effect Coming to Global Energy Market

Although China’s communist government appeared willing to avoid the energy shortages last year, many believed that the worst was still to come.

“Russian’s attack on Ukraine is an important geopolitical incident, clearly, but it will also have a seismic effect on the world oil and gas industry,” stated Edward Chow senior associate for Energy Security and Climate Change Program, at the Center for Strategic and International Studies. This think tank focuses on security.

” It’s too early to know what long-term effects this will have. My feeling is that this may be bigger than the two price shocks of the 1970s.”

Chow’s remarks referenced the five-month oil embargo on the West led by Saudi Arabia beginning in 1973. Even though it was short-lived, the embargo had severe consequences for the American oil supply. It quadrupled U.S. gasoline prices, and caused shortages throughout the country. The problems started by that crisis then fed into the oil shock of 1979, when markets overreacted to the loss of oil production from Iran, driving increased prices and shortages which ultimately sparked a long-term global recession.

” This will unfold over a long time,” he stated.

Given this long period, Chow stated that the complex relationship between Russia and China would have the potential to change–or even fracture–in fascinating ways. This is especially true given China’s close relations with Ukraine.

In order to defend Ukraine against nuclear-armed aggression, China signed an agreement with Ukraine before Russia invaded. In 1998., the regime bought its first Ukrainian aircraft carrier.

Chow stated that

“China is Ukraine’s biggest trading partner. Chow stated that China’s trade with Ukraine was more than German and Polish trade with Ukraine .

” The war will make things even more difficult going forward .”

The Growing Shadow of Sino-Russian Authoritarianism

American intelligence officials have stated repeatedly that the CCP-Kremlin partnership will continue to expand in the next ten years. Although there were doubts after the declaration of a partnership with “no limits”, between the regimes in February’s in-person meeting, Xi and Putin had in fact met in person. However, neither party has been able to shake the other’s commitment. In April, this statement was reaffirmed along with the unlimitted nature of the partnership.

Beyond this, it is alleged that the CCP was informed about Putin’s invasion plans in advance and asked that war against Ukraine be delayed until after the conclusion of the 2022 Beijing Olympics. Over the possibility of CCP military assistance to Russia, officials from Biden’s administration engaged in long talks for hours with CCP representatives. Additionally, a report from Ukraine, likely compiled by a friendly Western nation, claimed that China-based hackers conducted a massive cyber campaign against critical Ukrainian civilian and military infrastructure–including attacks on nuclear assets–the day before Russia’s invasion.

NATO members have called upon China to repudiate Russia and cease supporting its war effort. However, it remains unclear how much pressure the West will exert on Beijing regarding its economic relations with Moscow in light of increased tensions.

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