Since Russia launched its invasion of Ukraine on February 24, the question of the extent to which China will increase its purchases of Russian energy and provide Moscow with additional funds for its war effort has loomed large in Washington, Brussels and other world capitals. In March-July 2022, the amount of money China spent on imports of Russian crude oil, LNG, pipeline gas and coal increased by 68% over the same period in 2021 to USD 34.3 billion as Chinese companies took advantage of the discounts offered on cargoes of Russian energy, notably oil, shunned by other buyers. However, China so far has stopped short of signing new long-term supply contracts, investing in Russian energy companies or buying assets from Western oil companies departing Russia. The reasons for this probably are three-fold; they include concerns about Western sanctions, energy supply diversification and how changes in the sale of Russian oil on the international market might unfold with the G7’s agreement to cap the price of Russian oil.


Since Moscow launched its invasion of Ukraine on February 24, China has been a friend to Russia in both word and deed when it comes to bolstering Russia’s energy export revenue. In the week following the start of the war, a Chinese foreign ministry spokesman, Wang Wenbin, and the head of China’s banking and insurance regulator, Guo Shuqing, stated that China did not support Western sanctions on Russia and would continue to conduct normal trade with its northern neighbor.[1] In addition, China’s leader, Xi Jinping, reportedly instructed his closest advisors to find ways to support Russia without violating Western sanctions.[2]

Chinese energy importers have done just that. In March-July 2022, China’s imports of Russian crude increased by 10.2% to 1.7 million barrels per day (bpd) and LNG by 40.4% to 2.1 million tons.[3] Gazprom, Russia’s state pipeline monopoly, announced on August 1 that the volume of natural gas exported to China through the Power of Siberia pipeline grew by 60.9% in the first seven months of 2022.[4] (China has not reported the volume of any of its pipeline imports so far this year.) China’s imports of Russian coal, however, fell by 3.7% in March-July 2022 to 24.4 million tons, with monthly volumes decreasing year-on-year in March-May and increasing year-on-year in June and July.[5]

China’s elevated purchases of Russian oil and natural gas combined with higher commodity prices have boosted Russia’s earnings from energy exports to China. In March-July 2022, the amount of money that China spent on Russian crude oil, LNG, pipeline gas and coal increased by 68% over the same period in 2021 to USD 34.3 billion, according to Chinese customs data. A significant portion of this money was used for crude oil, which accounted for 74% of the total, USD 25.3 billion.[6]

It is likely that Chinese buyers are primarily motivated by bargain basement prices rather than altruism. They have been snapping up on the cheap cargoes of Russian fossil fuels shunned by other purchasers. For example, in May, Russia’s Urals crude for delivery to China in June sold at a $9 per barrel discount to Brent crude.[7] Similarly, in July, Russia’s ESPO crude was offered at a discount of $10-12 per barrel to competing crudes from Brazil.[8] Meanwhile, in April, high-quality Russian coking coal traded at an average price of $386 per ton in Chinese ports while Australian coal of the same quality was $473 per ton, according to Chinese traders cited in a Chinese industry press report.[9] Similarly, in July, Russian coal with a heating value of 6,000 kilocalories was trading at around $173-176 per ton compared to more than $400 per ton for benchmark Newcastle (Australia) coal.[10]

The increased procurement of fossil fuels is the latest example of China capitalizing on Russia finding itself in a challenging international environment.  Over the past decade and a half, China has provided capital to Russian energy firms in exchange for long-term supply contract, sometimes at attractive prices:

  • In 2009, the collapse in oil prices and credit crunch resulting from the global financial crisis left Russian energy companies short of capital. China agreed to lend them $25 billion in exchange for 300,000 barrels per day (bpd) of crude oil over 20 years and the construction of a cross-border pipeline (a spur from Russia’s East Siberia Pacific Ocean pipeline) with a capacity of 300,000 bpd to deliver them.[11]
  • In 2013, China National Petroleum Corporation agreed to lend Rosneft $70 billion dollars, an influx of capital the Russian national oil company needed to pay back the more than $32 billion it borrowed from international banks to help finance its $55 billion acquisition of TNK-BP. In return, Rosneft committed to deliver an additional 2.64 billion barrels of oil over the next 25 years and to double the capacity of the ESPO pipeline spur.[12]
  • In 2014, China finalized a supply contract for the delivery of 38 billion cubic meters (bcm) per year of natural gas over 20 years through a new pipeline, the Power of Siberia, during a time when Russia was internationally isolated after its annexation of Crimea. The agreement helped Russia diversify its natural gas exports to the East and allowed Russia to show that it still had a powerful friend on the world stage.[13] It also provided China with a new overland source of natural gas that is less expensive than its imports of LNG and pipeline gas from other countries (See table 1).


Table 1: Prices of China’s LNG and Pipeline Gas Imports in 2021[14]


Price (USD per mmBtu)

LNG (total imports, including Russia):


Pipeline Gas:













As of this writing, Chinese buyers have not signed any new long-term supply contracts similar to those mentioned above since February 4, when CNPC and Gazprom inked an agreement for the supply of 10 bcm per year of natural gas for 30 years through a new pipeline from the Russian Far East to northeastern China.[15] Although Gazprom announced on February 28 that it had signed a design contract for Soyuz Vostok, also known as the Power of Siberia 2 natural gas pipeline, China and Russia do not appear to be close to finalizing the 55 bcm per year project.[16]  Moreover, Chinese companies have not invested in Russian energy companies or purchased any oil and natural gas exploration and production assets from companies exiting Russia despite an interest in doing so.[17]  

There are probably several reasons for this:                                                 

First, Chinese entities are be cautious when it comes to engaging in transactions that might violate any future US sanctions. China’s major state-owned banks and oil companies have global operations and undoubtedly do not want to lose access to the US financial system. For this reason, two of China’s largest state-owned banks, Bank of China and Industrial and Commercial Bank of China, began restricting financing for Russian commodities immediately after the start of the war.[18]

In addition, the use of ship-to-ship (STS) transfers to deliver Russian oil to China may reflect concerns about sanctions on the part of Chinese buyers. STS transfers are often deployed to evade sanctions by masking the origin or destination of the oil. Almost 40% of the 1 million bpd of seaborne Russian oil imported by China in June arrived via STS transfers.[19]

Second, diversification has long been a hallmark of China’s approach to energy supply security. To this end, while Chinese companies have been increasing imports of Russian fossil fuels, they have also been pursuing long-term LNG supply contracts with other major exporters. Chinese LNG importers, which signed a flurry of contracts with US LNG exporters in the fourth quarter of 2021, have continued to ink new deals for US supplies since February 24.[20] Meanwhile, Reuters reported in June that China’s three major national oil companies were in advanced talks with Qatar about securing additional supplies under new long-term contracts.[21] These developments, in addition to diversifying China’s import portfolio, may also provide China with leverage in future supply negotiations with Russia, notably over the Power of Siberia 2 pipeline.

Third, Chinese companies might be holding off on signing new long-term oil supply contracts with Russian firms until they see how changes in how Russian oil is sold on the international market unfold. Specifically, in May, US Treasury Secretary Janet Yellen proposed that oil importing nations cap the price at which Russian oil is sold to reduce Russia’s oil export revenues and lower energy costs.[22]  On September 2, the G7 formally endorsed the idea, which would allow companies that transport Russian oil sold at prices below the cap  to have continued access to UK insurance companies, which cover 95% of the global oil shipping industry.[23]

China’s oil importers are likely to comply with the price cap, especially if it enables them to purchase Russian crudes at even lower prices. However, Beijing is highly unlikely to voice support for the G7’s initiative given its aversion to Western sanctions. Indeed, when a reporter from a Russian news agency asked Mao Ning, a spokesperson for China’s Ministry of Foreign Affairs, if China would support the price cap, he declined to endorse the initiative, stating that “we hope relevant countries will make constructive efforts to ease the situation through dialogue and consultation, instead of doing the opposite.[24]


In the more than six months since the start of the war in Ukraine, Chinese companies have opportunistically purchased discounted fossil fuels from Russia but have stopped short of signing new long-term supply contracts or acquiring stakes in Russian energy companies and projects. As a result, China is providing Russia with an economic lifeline of sorts through its elevated energy purchases, which increase Russia’s energy export revenues. However, the absence of major new energy deals to date has deprived Putin of opportunities to remind the West that it is not completely isolated on the world stage. So, China has been a friend to Russia but perhaps not yet as good a friend as Moscow would like.


[1] Ministry of Foreign Affairs of the People’s Republic of China, “Foreign Ministry Spokesperson Wang Wenbin’s Regular Press Conference on February 28, 2022,” February 28, 2022,; and “China will not join sanctions on Russia, banking regulator,” Reuters, March 2, 2022,

[2] Cate Cadell and Ellen Nakashima, “Beijing chafes at Moscow’s requests for support, officials say,” Washington Post, June 2, 2022,

[3] Customs Database, (for China’s imports and exports);.

[4] “Gazprom’s exports to China rose 61% in 7M,” Interfax, August 1, 2022,

[5] Ailing Tan, “China boosts spending on Russian energy to $35 billion since war,” Bloomberg, August 22, 2022,; “China’s spending on Russian energy jumps to$6.4 billion in June,” Bloomberg, July 20, 2022,; “China’s Russian oil imports surged over 50 percent in May, boosted by discounts amidst Ukraine war sanctions,” South China Morning Post, June 20, 2022, Dow Jones Factiva; Ailing Tan, “China spent over $6 billion on Russian energy imports in April,” Bloomberg, May 20, 2022,; and Muyu Xu, Dominique Patton and Min Zhang, “Update 1 – China’s March coal imports from Russia plunge 30% yr/yr,” Reuters, April 20, 2022, Dow Jones Factiva.

[6] Customs Database, (for China’s imports and exports).

[7] Bozorgmehr Sharafedin, Florence Tan and Chen Aizhu, “More Russian oil going east squeeze Iranian crude sales to China,” Reuters, May 19, 2022,

[8] Serene Chong, “Russian oil going about 10% cheaper in China as flows upended,” Bloomberg, July 19, 2022,

[9] “China imports a record amount of coal from Russia in April 2022” (20224月份,中国从俄罗斯进口煤炭创纪录), International Coal Net (国际煤炭网), May 13, 2022, This article lists the original source as Shipping Freshmaker (海事服务网CNSS).

[10] “China’s imports of Russian coal rise 22% due to cheaper cargoes,” Reuters, July 20, 2022,

[11] Robin Paxton and Vladimir Soldatkin, “China lends Russia $25 billion to get 20 years of oil,” Reuters, February 17, 2009,

[12] Jane Rudnitsky and Stephen Bierman, “Rosneft’s $270 billion oil deal set to make China biggest market,” Bloomberg, June 21, 2013,; and “Update 1 – Rosneft says China starts prepayments for oil deals,” Reuters, January 15, 2014,

[13] Alexei Anishchuk, “As Putin looks East, China and Russia sign $400-billion gas deal,” Reuters, May 21, 2014,

[14] Customs Database, (for China’s imports and exports); and “Approximate conversion factors,” BP Statistical Review of World Energy – Updated July 2021, p. 2,

[15] Chen Aizhu, “Russia, China agree 30-year gas deal via new pipeline, to settle in euros,” Reuters, February 4, 2022,

[16] “Gazprom paves way to new China gas deal as sanctions hit Russia,” Bloomberg, February 28, 2022,

[17] “China considers buying stakes in Russian energy, commodity firms,” Bloomberg, March 8, 2022,; and Tom Wilson, Sun Yu and Antoni Slodkowski, “Shell starts talks over ‘nightmare’ Russia exit,” Financial Times, April 22, 2022,

[18] “China’s State Banks Restrict Financing for Russian Commodities,” Bloomberg News, February 25, 2022,

[19][19] Robert Perkins, “Tanker switching surges for Russian oil as Moscow turns to ‘gray market’ playbook,” S&P Global Commodity Insights, August 1, 2022,

[20] See, for example, Cheniere, “Cheniere and PetroChina sign long-term LNG Sale and Purchase Agreement,” July 22, 2022,

[21] Chen Aizhu, “Exclusive: China firms in advanced talks with Qatar for gas field stakes, LNG offtake,” Reuters, June 17, 2022,

[22] Andrew Duehren, “Yellen says U.S., Allies Discuss Secondary Sanctions to Enforce Possible Price Cap on Russian Oil,” Wall Street Journal, May 19, 2022,

[23] “G7 Finance Ministers’ Statement on the united response to Russia’s war of aggression against Ukraine,” September 2, 2022,,Russia%20and%20aided%20by%20Belarus; and David Lawder and Christian Kraemer, “G7 Ministers forge ahead with Russian oil price cap, details thin,” Reuters, September 2, 2022,

[24] Ministry of Foreign Affairs of the People’s Republic of China, “Foreign Ministry Spokesperson Mao Ning’s Regular Press Conference on September 5, 2022,” September 5, 2022,


Erica Downs is a Senior Research Scholar at the Center on Global Energy Policy at Columbia University's School of International and Public Affairs.