Russian Crude Oil Now Flowing To China Via Arctic Ocean


In terms of cleaning up oil spills in ice-covered waters, burning the oil in place has been identified as the most effective and often only option, with serious environmental impacts.

Environmental organizations also warn against further fossil fuel exploration in the region.

“New fossil fuel production projects in the Arctic pose additional risks to Arctic ecosystems, species and communities that have been already impacted by rising temperatures,” explains Dr Sian Prior, Lead Advisor to the Clean Arctic Alliance, a coalition of 20 non-profit organizations working to protect the Arctic.

The region’s remoteness and lack of infrastructure will also increase the response time, prolonging the time the oil remains in the water.

“Remote and harsh Arctic conditions means long spill response clean-up times, with accidents ruining local ecosystems for decades,” cautions Prior.

China taking advantage of new reality

Meanwhile, China stands to benefit from Russia’s pivot to the East as it continues to expand its energy imports, primarily LNG and crude from the Arctic.

Dr Sian Prior is the Lead Adviser to the Clean Arctic Alliance. (Photo: Private)

In 2022, Russia surpassed Saudi Arabia as China’s largest supplier of oil. In total, China spent $58bn on oil imports from Russia in 2022, a figure that is likely to grow larger this year. In addition, it purchased $8bn of LNG from Russia, primarily from Novatek’s Yamal LNG plant in the Arctic.

Last year Russia sent around 35 percent of its oil exports to China, up from 31 percent in 2021. 

On average, China pays $7 less per barrel for Russian crude oil than it pays for products from other countries. Analysts say that Chinese refineries have been able to use the western ban on Russian crude oil to their advantage in price negotiations with Russian sellers.

“As Moscow is no longer able to sell its fossil fuels in Europe, Asia has become a vital partner for Russian energy trade, with China at the head of the line,” explains Marc Lanteigne professor and researcher in politics, security and international relations at the University of Tromsø.

“Beijing has also successfully been able to negotiate bargain prices for these shipments, helpful at a time when China is still recovering from its post-Covid economic disruptions,” he continues.

While Chinese support of Russia’s energy ambitions has limits – in May President Xi Jinping did not publicly endorse the development of the Power of Siberia 2 pipeline – it appears committed to take receipt of fossil fuels delivered via the NSR.

“It is highly likely that Beijing will continue to take advantage of a window of opportunity to import more oil and gas from Russia as European markets remain closed,” concludes Lanteigne.



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