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Opinion | Russia needs China’s market more than China needs Russian gas
- Despite increased Russian oil and gas imports, China’s climate goals and supposed push for lower rates complicate plans for another pipeline
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Despite its ambitious plans to become carbon neutral and energy self-sufficient by 2060, China remains dependent on the import of fossil fuels. But China - unlike the European Union, which has begun an “energy divorce” from Russia since the invasion of Ukraine - can still rely on inexpensive Russian natural gas and oil.
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Cut off from Western markets, Russia – whose oil and gas income accounts for nearly 30 per cent of its national budget – desperately aims to find new customers for its energy. Over the past two years, Russia has significantly increased its oil exports to India. Now it seeks to build the Power of Siberia 2 pipeline that would allow for the supply of 50 billion cubic metres of natural gas per year to China.
In 2023, Russia became China’s top source of crude oil imports. Russian exports of natural gas to China increased by 61.7 per cent compared to 2022. However, China appears not to be in a hurry over the Power of Siberia 2 pipeline. One of the main reasons for this delay could be concerns over price.
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It is no secret that China is taking advantage of Russia’s “energy decoupling” from Europe to get better prices for Russian gas. The European Union has found ways to significantly reduce its gas imports from Russia. However, energy cooperation with China has not allowed Russia to fully make up for the loss of the European market.
In 2023, Russia exported only 28.3 billion cubic metres of natural gas to Europe, which is a drop in the ocean compared to the 192 billion cubic metres that Gazprom alone sold to European countries in 2019.
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