• 6 minutes WTI @ 67.50, charts show $62.50 next
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Starvation, horror in Venezuela
  • 3 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 15 mins The EU Loses The Principles On Which It Was Built
  • 2 hours Crude Price going to $62.50
  • 8 hours Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 1 hour Chinese EV Startup Nio Files for $1.8 billion IPO
  • 13 hours Correlation does not equal causation, but they do tend to tango on occasion
  • 12 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 8 hours Why hydrogen economics is does not work
  • 58 mins WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 22 hours California Solar Mandate Based on False Facts
  • 12 hours Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 21 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 14 hours Monsanto hit by $289 Million for cancerous weedkiller
Alt Text

The Shale Boom That Will Never Happen

Andres Manuel Lopez Obrador has…

Alt Text

India’s Largest Refiner Plans $25B Output Boost

India’s largest refiner, Indian Oil…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

Russia And China Continue To Boost Oil Ties

Oil

Even before the OPEC/non-OPEC production cuts took effect in January 2017, Russia had already beaten Saudi Arabia to become China’s single largest oil supplier for 2016. Since then, Saudi Arabia has sacrificed still more of its market share in the prized Chinese market, while Russia has dominated Beijing’s top suppliers’ list for most of this year.

Now Russia’s oil giant, Rosneft—whose chief executive Igor Sechin is a close ally of Vladimir Putin—is reportedly aiming to further increase its crude oil deliveries to China, as Russia looks to boost energy ties with the world’s biggest crude oil importer and top driver of global oil demand growth.   

Since the OPEC/Russia oil production deal began, the U.S. has stepped up sanctions on Russia, which made Western banks and companies even more cautious in dealing with Russian firms. Considering this, it’s not a huge surprise that Rosneft and Russia want to boost ties with Chinese firms, refiners, and banks.

Rosneft now aims to almost double its crude oil exports to China through Kazakhstan, Reuters reported last week, citing industry sources. 

Although it’s not immediately clear when that increase will take place, this plan is only the latest in a series of projects that boost Russian oil supplies to Chinese refiners. Chinese firms, on the other hand, recently made big investments in Russian energy projects and firms, including in a large stake in Rosneft.

Chinese industrial conglomerate CEFC recently agreed to buy 14.16 percent in Rosneft for approximately $9 billion. The deal didn’t come as a surprise, coming on the heels of a Rosneft announcement regarding the sealing of a strategic partnership deal with CEFC, but it’s clearly indicative of a continuing warming between Moscow and Beijing that gave the former the upper hand in the race for market share with Saudi Arabia.

Related: Higher Oil Prices Could Threaten Saudi Vision 2030

Last year, Russia’s Novatek sold 9.9 percent in the Yamal LNG project to China’s Silk Road Fund for $1.3 billion (1.1 billion euro), months after the Silk Road Fund had extended a 15-year loan of $857 million (730 million euro) to the project financing. The same fund also acquired 10 percent in Russia’s gas processing and petrochemicals group Sibur.

In June this year, Beijing Gas Group closed the deal to buy 20 percent in Rosneft’s subsidiary Verkhnechonskneftegaz for around $1.1 billion, obtaining a stake in one of the largest producing fields in Eastern Siberia.

“Corporate partnerships with China are one of the very few alternatives still open to Russian players to finance their expansion ambitions,” Alejandro Demichelis, director at boutique investment bank Hannam & Partners in London, told the Financial Times last month.

While money flows in the China-to-Russia direction, crude oil supplies are flowing in the opposite direction. Chinese refiners are preparing to receive increased volumes of Russian crude oil via the Eastern Siberia Pacific Ocean (ESPO) starting in January next year, when the expansion of the capacity of the ESPO pipeline—which branches out to China—will be complete. Rosneft will increase its ESPO Blend deliveries to PetroChina to 600,000 bpd next year, up by 50 percent compared to 2017.  

“Plants were told to be prepared for more Russian oil next year,” a Chinese refinery source told Reuters last month.

Russia and China are growing their partnership and investment links as Moscow scrambles to find ways to fund oil and gas projects that are made difficult under Western sanctions. Russia is also stepping up efforts to secure oil dominance in the Chinese market, grabbing some of the market share of OPEC’s de facto leader Saudi Arabia.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News