China increases dependence on Russian energy imports

Imports and Exports | | MIC Customs Solutions |

Chinese energy imports from Russia have reached new highs this year, figures have revealed.

Imports of Russian energy to China reached record highs in July as Beijing continued to increase its reliance on foreign fossil fuels.

Bloomberg reports that more than $35 billion worth of energy has been imported since February. As a result, Russia has now supplanted Indonesia as China's biggest overseas supplier of coal, while deliveries of crude oil and liquified natural gas (LPG) also showed large year-on-year increases.

While the value of energy has been affected by the global spike in energy prices as a result of the war in Ukraine, China has also increased the volumes of energy it imports. Bloomberg noted that it has also been able to negotiate discounted rates as Western countries scale back on Russian oil and gas.

In total, China increased its spending on Russian energy to $7.2 billion in July, up from $4.7 billion in the same month last year. Energy shipments now make up around 70 percent of the country's total imports from Russia. 

Crude oil shipments were up by eight percent year-on-year, at 7.15 million tons, while LPG deliveries totalled around 410,000 tons, a 20 percent increase on the same month in 2021. Imports of coking coal to support China's steel industry were also up by 63 percent over last year, reaching two million tons.

The figures come as warnings were raised about the impact of an ongoing drought on China's domestic energy production. A prolonged dry spell has seen water levels fall to unprecedented lows in many of China's major rivers, which is having a knock-on effect on the country's network of hydroelectric dams.

In the southwest of the country, factories have been shut down and rolling blackouts imposed in order to ration power. In Sichuan, for example, water levels at reservoirs are down by as much as half in the last month, which may mean Beijing has to turn to overseas suppliers of energy to make up for the shortfall.