The visit comes just over a year after Russia launched what it calls a “special military operation” in Ukraine, triggering sanctions by the European Union on purchases of Russian seaborne crude and coal, and a price cap agreed by the Group of Seven on Russian crude oil in December.
The EU also halted piped gas imports from Russia, distorting the global LNG market.
China, the world’s top energy consumer, has not agreed to any of the moves. With Moscow under pressure to sell surplus volumes no longer going to the EU, China has saved billions of dollars on purchases of cheaper Russian oil and coal, and made returns trading excess supplies.
Xi has said China wants a closer energy partnership with Russia that would maintain international energy security and supply chains.
Below are details on how much China has gained so far.
CRUDE OIL
China’s crude imports from Russia jumped 8% in 2022 from a year earlier to 86.25 million tonnes (1.7 million barrels per day), according to Chinese customs data, even as the country’s overall imports slipped 0.9% last year due to a slowdown in its economy.
That gave Russia a 17% share of the Chinese oil market, up from 15% the year before, though it remained a close second to top supplier Saudi Arabia, which supplied 87.5 million tonnes.
It also brought large savings. Based on an estimated $10 a barrel discount for both ESPO and Urals crude on delivered basis, Chinese refiners saved about $5.5 billion over the April 2022 to January 2023 period, according to Reuters’ calculations.
Independent refiners in the eastern province of Shandong were the biggest beneficiaries. State refiners also gained from the cheaper oil, while others made profits from trading the barrels, traders said.
China’s seaborne crude imports from Russia are set to hit an all-time high of about 1.4 million bpd in March, according to Vortexa and Kpler.
COAL
China has also increased coal imports from Russia even as it cut back overall imports of the fuel because of more domestic production.
Russian coal arrivals surged 20% in 2022 from a year earlier to 68.06 million tonnes, with coking coal imports doubling to reach 21 million tonnes, showed customs data, as China bought discounted coal while Europe shunned Russian cargoes and later banned them on Aug. 11.
Without bottlenecks in Russian rail capacity that are hampering transport of coal eastwards, imports could have been even higher.
Average import prices of Russian coking coal were around $217.33 a tonne in 2022. That compares to an average of $364.66 a tonnes for Australia’s premium coking coal on a free-on-board (FOB) basis.
LNG
For LNG, China’s imports from Russia soared over 40% on an annual basis in 2022 to 6.5 million tonnes, while exports rose as China re-exported volumes to top importers like South Korea, Japan and France.
That came even as overall LNG imports by China fell 19.5% last year to 63.4 million tonnes, as strict lockdown measures slowed economic activity and curbed demand.
China spent on average just under $20 per million British thermal units (mmBtu) for each tonne of imported Russian LNG, Chinese customs data shows. This compares to an average Asian spot LNG price of $38.80/mmBtu in 2022.
POWER
Electricity imports from Russia, mainly via a cross-border transmission line connecting northeast China and Russia’s Far East, stayed steady over the period of 2017-2020 at about 3 billion kilowatt-hour (kWh).
Imports grew to 3.8 billion kWh in 2021 as China suffered a wide-ranging power shortage and continued to increase by 23% in 2022 to 4.7 billion kWh.