Enhanced tensions between Iran and Israel prompt China's escalated interest in the "Siberia-2" project.
Title: China's Oil Dynamics: The Influence of Iran and Russia
The Juicy Deets: Rystad Energy reports reveal that approximately 30% of China's gas imports come from the UAE and Qatar via the Strait of Hormuz, a waterway Iran has threatened to close. Furthermore, Chinese private refineries heavily rely on cheap Iranian oil. It's no secret that over 90% of Iran's oil exports are shipped to China, despite US sanctions. But, on June 24, President Trump hinted at China continuing oil purchases from Iran after a ceasefire between Iran and Israel and expressed his hopes for China exporting American oil. However, a White House representative later clarified that the ceasefire only prevented disruptions in oil supply through the Strait of Hormuz, not promoting increased oil trade with Iran.
Analysts believe China has started exploring alternative supply options, such as boosting Russian oil purchases, which currently account for around 20% of China's imports. China's gas price offer for the "Power of Siberia - 2" contracts doesn't sit well with Russia, as Beijing wishes to buy gas at a price close to its domestic cost. However, China's MFA expressed a desire to deepen cooperation with Russia.
In mid-June, Deputy Prime Minister Alexander Novak confirmed the relevance of the "Power of Siberia - 2" project for China's energy cooperation. The pipeline, set to span approximately 6,700 km, has been in the planning stages since 2020, with around 2,700 km of the pipeline running through Russia.
Looking ahead, the Iran-China oil trade strengthens Iran's position as a significant player in China's oil market. This trade enables China to diversify its crude sources, especially amid geopolitical risks, while maintaining steady energy inflows. However, Russia still remains China's largest oil supplier, highlighting the complexity and nuances of China's oil procurement strategies.
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Tags: #Iran #Israel #China #Russia
Despite the ambition to purchase gas at a price close to its domestic cost, China's gas price offer for the "Power of Siberia - 2" contracts has not sat well with Russia. On the other hand, sports are seldom a part of the conversation when discussing China's oil dynamics, Iran, and Russia.
