“Serious consequences”
A trio of Republican senators in the United States introduced a China sanctions bill. Florida’s Marco Rubio joined Rick Scott and Kevin Kramer of North Dakota on the measure. The draft would levy penalties on any agency that insures or registers tankers delivering oil or liquefied natural gas from Russia to China.
Rubio argues that China is supporting the war in Ukraine by purchasing Russian energy, and he says new sanctions are needed to curb Russian oil sales and restrict the financing of Russia’s military actions. He stated that any organization aiding Russia, including Chinese state-owned firms, should face serious consequences.
The report notes that China has boosted its imports of Russian oil this year because the world’s largest energy consumer is buying barrels at discounts that European buyers have declined. Yet restricting Russia’s oil supply to China could push Beijing to compete more aggressively with other large buyers such as India for oil from the Middle East and Africa, potentially causing a new rise in global fuel prices.
Analysts pointed out that the proposal has limited odds of passage in the Senate, which is controlled by Democrats. The plan appears to clash with the Biden administration’s goal of constraining Russia’s energy revenues while keeping oil markets stable.
News outlets recalled that last week, U.S. Treasury Secretary Janet Yellen floated the idea of price caps, which would let buyers continue to use Russian oil if they pay below market rates. The administration is still shaping this policy and trying to persuade European allies of the approach while ensuring Russia cannot easily shut off its supply.
On July 22, U.S. Deputy Secretary of State Victoria Nuland stated that the United States and its allies still rely on Russian oil supplies for world markets, warning that prices could rise if those supplies are disrupted.
Bloomberg reports that oil prices rose roughly 30 percent since February 24 amid concerns that Russian fuel could be cut off from global trade. European nations are also considering rationing natural gas consumption, largely sourced from Russia, to preserve stocks for the winter.
Record purchases of Russian oil
April 21 saw the Japanese newspaper Nikkei, citing Refinitiv data, noting that Asian nations continued to buy large volumes of oil from Russia despite the Ukraine crisis and sanctions. By that date, 380 tankers had departed Russia, a higher tally than in the same period of 2021.
Of these ships, 115 headed to Asia: 52 to China, 28 to South Korea, 25 to India, nine to Japan, and one to Malaysia. The article’s authors observed that deliveries to India surged eightfold and to China by about a third.
Refinitiv data shows that after the start of Moscow’s military operation in Ukraine, European prices for Russian Ural oil dropped by about 30 percent. At the same time, Western governments including the United States and the United Kingdom halted oil imports from Russia. This shift made Russian fuel more attractive to buyers who were not deterred by public scrutiny.
By June 20, Reuters cited Chinese customs data indicating a 25 percent month-over-month rise in Russian oil purchases in May, setting a record for monthly deliveries.
News agencies noted that May shipments to China reached about 8.42 million tons, roughly 1.98 million barrels per day, compared with 1.59 million barrels per day in April. Earlier in April, a Chinese official stated that Beijing did not intend to take steps to circumvent Western anti-Russian sanctions, but would continue to cultivate traditional trade relations with Russia and other partners.