Experts emphasize that strengthening energy ties with Russia will be an important outcome of the current situation — both in the oil sector and in the gas sphere. "If Iran becomes more pro-Western or there is a sense of its instability, this will only strengthen the alliance between China and Russia," says Neil Beveridge, head of China energy research at Bernstein in Hong Kong.
Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at the investment bank Natixis, noted that U.S. and Israeli military actions against Iran have "more serious consequences" for China's energy security than the recent events involving Venezuelan leader Nicolás Maduro. Venezuela accounted for only 4% of China's maritime oil imports.
She also added that Putin may try to raise prices on Russian oil and gas for China. "China is currently in a less advantageous position," Garcia-Herrero believes.
Steps are already being taken in this direction. According to an oil trader from Ningbo, China's largest oil companies have increased their purchase volumes from Russia in recent weeks. The resumption of operations at the idled oil refining unit in Dalian is also being discussed, which will allow for increased capacity to receive additional supplies from Russia.
In the long term, the trader pointed to new Arctic trade routes that may open up with the melting of ice, allowing for faster and cheaper transportation of oil through Europe and increasing supply volumes from Russia.
Analysts also suggest that Beijing may accelerate the construction of the "Power of Siberia-2" gas pipeline, which will supply natural gas from northwestern Russia through Mongolia to China. The implementation of this multi-billion dollar project is expected by the early 2030s.
The post China will rely on Russian oil due to the Iran crisis — The Financial Times first appeared on K-News.
