- Moscow’s state-owned oil giant, Rosneft, signed a US$80 billion 10-year deal to supply the China National Petroleum Corporation (CNPC) with 100 million metric tonnes of oil.
- This increase in crude oil delivery volumes and mechanisms to China is part of a broad-based strategy to circumvent to as great a degree as possible the effects of international sanctions against Russia.
- This multi-level cooperation strategy between Russia and China provides financing into Russia from China, regardless of possible sanctions from the U.S. and its allies.
At around the same time as Russian President, Vladimir Putin, had his first in-person meeting with his Chinese counterpart, Xi Jinping, for nearly two years – at the opening of the Winter Olympics ceremony in Beijing – and reiterated that there is ‘no limit’ to how far Russian and Chinese friendship may go, a slew of huge new cooperation deals in the oil and gas sectors and beyond were being announced by state news agencies on both sides. As analyzed in-depth in my new book on the global oil markets, the two countries have been working in an increasingly coordinated manner in the past few years in multiple operational spaces, all towards the central aim of weakening the dominant global power position of the U.S., and then supplanting it in this role. Nowhere has this coordinated strategy been more obvious in oil and gas sector terms than in the Middle East, especially since the U.S.’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) with Iran in May 2018. Its subsequent withdrawal from Afghanistan in September 2021, and then the ‘end of combat mission’ in Iraq in December 2021, has reinforced the Russia-China axis’s confidence that achieving their aim will only be a matter of time. Consequently, those countries in the Middle East who seek to portray themselves as neither on one side or another – and, bizarrely, chose to excuse how China is likely to deal with their own Muslim cultures in their recent attempt to seal a China-GCC Free Trade Agreement – either do not realize that the current power struggle between the U.S. and its allies, and China-Russia and its allies, is a zero-sum game, or are jejune at best…read more.