The growing cooperation is likely to deepen further after Chinese President Xi Jinping's meeting with Russia's Vladimir Putin in Uzbekistan, a boon for both the countries.
China has gained access to cheaper energy while Russia is able to offset losses from the European Union and other allies scaling back on purchases of Russian exports due to the recent imposition of the sanctions.
Closer Chinese-Russian ties have also promoted the use of their yuan and rouble currencies in commodities trade, lessening reliance on the US dollar.
China,
the world's largest energy consumer and top buyer of crude oil, liquefied
natural gas and coal, has imported 17% more Russian crude between April and
July as compared to the same period a year ago.
It has also bought over 50% more LNG and 6% more coal from Russia during the same period while electricity imports from Russia, mainly via a cross-broader transmission line connecting northeast China and Russia's Far East, soared by 39%.
China's oil, gas, coal and electricity purchases from Russia amount to US$43.68 billion so far this year.
Russian crude oil gains market share in China despite decline in overall imports
Cheaper Russian energy supplies are helping to control inflation in China, where the economy narrowly avoided contracting in the second quarter amid COVID-19 lockdowns.
The recent meeting between Xi and Putin is likely to fortify China's ties with Russia in energy trade for mutual benefit, particularly at a time when Russia is grappling with intensified western sanctions, while China is in need of low-cost energy to shore up its sagging economy.
Russia became China's top crude supplier from May to July, accounting for 19% of China's imports, versus 15% in the same period of 2021. Russia's share could grow to more than 20% this year.
China saved about US$3 billion in buying Russian oil. At an average, China paid about US$708 per ton for Russian crude while the value of imports from the rest of countries was US$816 per ton.
For LNG, China's imports from Russia rose 26% in the first seven months as compared to the same period a year ago, while exports jumped to 66,798 tons in July, the highest since 2019, on re-exports to Europe and Japan.
"China is taking advantage of the disrupted trade flows, including by buying discounted Russian oil and LNG cargoes, while swapping out alternative volumes back into Europe at higher prices, delivering a profitable trade," said Saul Kavonic, head of Integrated Energy and Resources Research at Credit Suisse.
China also has long-term incentives for Russian supply as it strives to meet new carbon emissions targets and boosts gas consumption. That prompted a February deal for a new pipeline from Russia to start in the next two to three years.
China's coal imports from Russia jumped to their highest in at least five years in July, as it bought discounted coal while Europe shunned Russian cargoes ahead of a ban that came into force on August 11, 2022
Russian thermal coal with a heating value of 5,500 kilocalories (kcal) traded around US$150 a ton on a cost-and-freight basis in late July, while coal of the same quality at Australia's Newcastle port was assessed at more than US$210 a ton on a free-on-board (FOB) basis.
China has increased coal imports from Russia although it cut back overall imports of the fuel
Though Russian supplies meet only about 1% of Chinese needs, some traders expect more Russian coal to arrive in the fourth quarter when utilities build stocks for the winter heating season.
Analysts said that while the gains for China are clear, Russia remains more reliant on the trade than China.
It is apparent that Russia can no longer rely on its major energy export markets in Europe for the foreseeable future, and the redirection of its energy and commodity exports towards the East will gather pace.
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