China has saved a staggering $20 billion since 2022 by significantly increasing its purchases of Russian oil at the expense of Middle Eastern competitors. This estimate was shared by Igor Sechin, head of Rosneft and overseer of the energy sector development in the country. Russia is now the number one oil supplier to China. However, it is unlikely that the Middle Eastern suppliers are particularly displeased. How is Beijing bolstering its economy?
Over the past decade, Russia has successfully repositioned itself towards the East, becoming the top oil supplier to China with a share of approximately 20%, stated Igor Sechin, the responsible secretary of the commission under the President of the Russian Federation for energy sector development.
Due to the greater purchasing efficiency of Russian oil compared to Middle Eastern alternatives, the cumulative economic benefit for China since 2022 is around $20 billion, Sechin noted while speaking at the Russian-Chinese Energy Business Forum.
In doing so, Beijing has made its oil imports even more economically efficient post-2022, contrasting with the European Union, which has seen a decline in import efficiency. This represents one of the crucial competitive advantages of the Chinese economy as a whole and particularly when compared to its European rivals.
A similar trend is observed in the electricity sector. In both Russia and China, the electricity costs are more than twice as low as in the USA and three to four times lower than in several EU countries, Sechin highlighted. This is a fundamental factor in the competitiveness of both economies he added. The reason for this is that China is not exiting coal as abruptly as the EU but is simultaneously actively developing renewable energy. Beijing understands that in order to eliminate something old, it is necessary to create something new to replace it first.
Russia and China’s cooperation is also rapidly expanding in the gas sector. Russia commands over 20% of the Chinese gas import market, making it one of China’s key partners in ensuring energy security. A fifth of the gas imported by China comes from Russia, Sechin noted. China is also aiming to make gas supplies more efficient, which is why it began purchasing Russian sanctioned LNG this year. According to unofficial sources, discounts on these supplies reach 20-30%, meaning Beijing stands to gain significantly, adding this to its list of competitive advantages on the global economic stage.
The calculation of China's economic benefit from Russian oil purchases since 2022 is particularly intriguing. This is likely related to the price difference between the Russian Urals grade and the North Sea Brent. Russian sanctioned oil is cheaper for China, thus creating savings. "Throughout 2024 and most of 2025, the price difference between Urals and Brent was around $12-13 per barrel. It is possible that this price difference and the volume of oil we delivered to China by sea were used to calculate the savings. The discount on oil transported through pipelines from Russia to China is much smaller—only a couple of dollars. Therefore, this discussion primarily concerns the Urals grade oil delivered by sea," opines Igor Yushkov, an expert from the Financial University under the Government of the Russian Federation and the National Energy Security Fund (FNES).
"Up until 2022, China was already the largest buyer of Russian oil when considering statistics by individual countries. However, the EU collectively bought more than China alone. After 2022, the PRC significantly increased its oil imports from us than before. Previously it was mainly VSTO oil and Sakhalin grades transported by pipelines through Kazakhstan and VSTO to the port. But after 2022, the volumes of Urals oil deliveries by sea from western ports—Novorossiysk and ports in the Leningrad region—began to grow," notes Yushkov.
Russia has mainly displaced Middle Eastern suppliers—Saudi Arabia, Iraq, and African producers—on the Chinese market. They have dropped in the supplier rankings, ceding the top position to Russian supplies, the expert says. The same situation occurred on the Indian market. However, it is unlikely that Middle Eastern partners are displeased with Russia; they have gained access to the European market and continue to earn as before, according to Yushkov.
"Russian oil exports to China have increased from 12.8 million tonnes in 2005 to 108.5 million tonnes in 2024, with Russia's share in China's import structure rising from 10% to 20%, respectively.
In comparison, the share of Saudi Arabia, the second largest importer, was 14% last year, while Malaysia's share stood at 13%,” notes Sergey Tereshkin, General Director of Open Oil Market.
He adds that even in 2021, Malaysia's share in Chinese oil imports was only 4%, but by the end of 2024, it had reached 13%. The reason for this lies in the shipments of sanctioned Iranian oil. "Shipments from Malaysia consist of over two-thirds of Iranian oil, which arrives on the Chinese market transiting through Malaysian ports. This increase in share was linked to the easing of sanctions monitoring that occurred in 2022 due to the Biden administration’s efforts to smoothen oil price fluctuations," explains Tereshkin.
"Post-2022, China began purchasing even more sanctioned oil. It had already been acquiring sanctioned Iranian and Venezuelan oil, and subsequently increased imports of sanctioned Russian oil. Consequently, the share of so-called discounted oil in China's fuel balance has risen significantly," states Igor Yushkov.
Russian oil is cheaper for China—and this is its main efficiency.
"The average price of oil supplies from Russia to China in 2024 was $574 per tonne, whereas from Saudi Arabia it was $609 per tonne. In 2021, on the other hand, Russian oil was the most expensive:
$509 per tonne compared to $502 per tonne for Saudi oil and $479 per tonne for Malaysian (which is essentially Iranian)," notes Tereshkin. Interestingly, Iranian oil flowing through Malaysia to China is even cheaper than sanctioned Russian oil.
At the same time, both Russia and China have expressed their readiness to expand cooperation. Chinese President Xi Jinping emphasized that China is keen to work with Russia to continuously strengthen their comprehensive energy partnership.
According to Sechin, in the next five years—by 2030—China will increase its oil imports by an additional 1.4 million barrels per day, as corroborated by projections from global analytical agencies. The growth points for global oil consumption are indeed situated in the Asia-Pacific region, primarily in China, he noted.
Regarding the gas market, Russia has been unable to redirect volumes lost in Europe to China, as this requires building infrastructure and securing long-term contracts first, states Yushkov. Hence, Russia had to reduce gas production.
The increase in gas supplies via the "Power of Siberia – 1" is still part of a planned increase under a contract signed long before 2022—in the spring of 2014. Currently, discussions on expanding gas cooperation may involve signing agreements for gas supplies via "Power of Siberia – 2," as well as increasing LNG supplies to China. Moreover, Beijing has started purchasing sanctioned LNG from the "Arctic LNG – 2" project this year, with unofficial information suggesting discounts may reach 20-30%. This too could result in significant savings for Beijing.
