China has replaced Germany as the largest buyer of Russian energy since Moscow’s invasion of Ukraine began, a report by Finland’s independent Centre for Research on Energy and Clean Air (CREA) released on June 13 shows.
The report estimates that Russia received €93bn ($97bn) in revenues from the overseas call of oil, natural gas and coal during the first 100 days of the invasion, which began on February 24. Some 61% of these sales worth €57bn went to the EU, despite the bloc’s concerted push to cut energy ties with Russia. The EU has banned coal imports from Russia and will introduce a similar embargo affecting 90% of oil supplies at the end of the year.
European countries are reluctant to introduce similar measures against Russian gas because of their level of dependency on these supplies. But the European Commission has proposed measures to reduce gas use and expand imports from alternative suppliers that could result in a two-thirds reduction in volumes within a year.
Some €12.1bn worth of Russian energy was received by Germany between February 24 and June 3, while €7.8bn was taken by Italy, €7.8bn by the Netherlands and €6.7bn by Turkey, CREA data shows. While Germany was the biggest importer of Russian fossil fuels during the first two months of the war, it was then replaced by China as the largest market, which purchased some €12.6bn worth of oil, gas and coal from Russia during the 100-day period.
As a whole, the EU slashed its energy imports from Russia by over €100mn daily in May, according to the report. But this also reflects Russia’s move to cut off gas supply to Bulgaria, Denmark, Finland, the Netherlands and Poland, and reduce flow to Germany, over buyers’ refusal to comply with a Kremlin decree on ruble payments for gas.
CREA also noted that China, France, India, Saudi Arabia and the UAE stepped up imports of Russian fuels, taking advantage of their significant discount on the market. The research group noted that “as Russian oil is increasingly shipped to more distant markets, more tanker capacity than ever before is needed.”
“This is a key vulnerability – strong sanctions against tankers transporting Russian crude would significantly limit the scope for this kind of rerouting of Russia’s exports,” it said.
In April-May, 68% of Russian crude deliveries were made on board ships owned by EU, UK and Norwegian companies, it said, while Greek tankers alone carried 43%.