A few days ago, the Chinese Ministry of Commerce held a meeting with representatives of about 10 domestic oil refiners, focusing on their oil trade with Russia.

China and India are importing large volumes of Russian oil at discounted prices against the backdrop of the West imposing price caps on Russian oil, but the West has recently renewed its sanctions and lowered the price cap. In this regard, the Ministry of Commerce communicated with representatives of relevant companies and asked them whether they have encountered any obstacles in energy trade with Russia.

West puts price cap on Russian oil

"The government wants to know the realities of the energy trade so that when it communicates with Russia, it knows what to talk about," said a person familiar with the matter. In addition, representatives of various companies were also asked about the impact of the new round of "price limit orders" in the West on China.

First of all, we should note that China has not commented on this report. But judging from the current signs, one thing we can at least be sure of is that China and Russia have already sent very positive signals about deepening energy cooperation, and our attitude is quite pragmatic. Russia has an opportunity to further show its sincerity.

russian president putin

The energy trade between China and Russia is not as smooth as everyone imagined in the implementation process. Although China's import of Russian energy is a matter for China and Russia, in the context of globalization, the disadvantages brought by Western sanctions The impact is still there. How to better overcome the impact of Western sanctions and further deepen energy cooperation is what China and Russia need to focus on next.

For example, in the field of oil, after the West launched the first round of oil price limit orders against Russia on December 5, 2022, PetroChina and Sinopec once suspended oil imports from Russia by sea. Later, as Russia began to provide China with a large amount of discounted oil, they also began to gradually resume imports of Russian seaborne oil, but their attitude was still relatively cautious. Almost all goods were delivered by traders who arranged transportation and insurance.

PetroChina and Sinopec once suspended oil imports from Russia by sea

A little explanation is needed here. The specific measures taken by the West to limit the price of Russian oil are that once a buyer buys Russian oil at a price exceeding US$60, any Western company will be prohibited from providing financial services such as shipping insurance to this batch of oil. The reason why the West dares to do this is that Western companies monopolize more than 90% of the business of the global shipping insurance industry. Of course, China has no reason to ignore these sanctions from the West.

On February 5, 2023, the West adjusted the price ceiling of Russian oil from $60 to $45. In this regard, the Chinese government actively communicated with business representatives, discovered and collected new problems, and planned to communicate with the Russian side. It can be said that this pragmatic attitude is our greatest sincerity. In the future high-level communication between China and Russia, we should not only talk about the great prospects of China-Russia energy trade at the macro level, but also talk about the specific problems in related fields at the micro level.

The West further lowered the price ceiling, squeezing the profit of Russia's oil and gas exports

However, we must also be clear: win-win cooperation is two-way, and sincerity should also be two-way. Despite Western sanctions, China imports a large amount of energy from Russia for the sake of a win-win situation rather than a loss. When we do business with any country, it is not Zheng He’s voyages to the West, nor is it rewarding countries under the tributary system of the past dynasties. We do not do business at a loss, let alone transfer benefits through international trade, but we hope that our partners will bring Come with plenty of sincerity.

The Sino-Russian natural gas negotiations lasted for 15 years, and the biggest obstacle was the price. The long-term oil contract negotiations between the two countries went back and forth because of the price. So in future price negotiations, should Russia be less persistent on the price issue? Don't keep thinking about letting China form a competitive relationship with other Asian countries and maximize profits from it?

After 15 years of Sino-Russian natural gas negotiations, the biggest obstacle is the price

For a long time, Russia has neglected the construction of infrastructure in the eastern region. Today, Russia's coal, oil, and natural gas collectives are "looking eastward", but the lack of infrastructure has hindered China and Russia from further expanding the scale of energy trade. Russia, which once worried that infrastructure construction in the eastern region would lead to "Chinese occupation of the Far East", should it let go of these unnecessary doubts now?

In addition to energy, the Russians also have room to show their sincerity in other areas of cooperation. For example, on the issue of "de-dollarization", China and Russia have now realized the local currency settlement of the Power of Siberia No. 1 natural gas pipeline project. Then, should the Sino-Russian crude oil pipeline (ESPO) and the future "Siberian Power 2" also realize local currency settlement as soon as possible?

Director Wang Yi is about to visit Moscow, and the heads of state of China and Russia may also meet this year. It can be said that the two countries do not lack communication channels. As long as Russia wants to show sincerity, we can catch it at any time. 2023 is a critical year for China and Russia to achieve the goal of a trade volume of US$200 billion. In the field of energy, the largest field of cooperation between the two countries, China has shown its attitude and sincerity to achieve this goal. But a slap can't be made, and the next thing depends on Russia. Editor / Zhao E