Leading energy analyst says Russian gas sales to China 'will not make up for loss of European markets'

A leading energy analyst has said that Russian gas sales to China ''will not make up for the loss of European markets.''

Tatiana Mitrova, a research fellow at the Centre on Global Energy Policy, Columbia University said that, ''China’s real value is as a source of necessary goods after the West imposed sweeping sanctions on Moscow following the attack on its neighbour.''

''Russia is exporting about 170 billion cubic meters (bcm) of natural gas to the European markets every year and the prices for the two buyers are dramatically different.''

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“They are definitely not able to offset the whole exports which are now going to the West.”

“You remember this ‘oil for products’ programme in Iran? It’s rather moving in this direction, not about trading, but just about providing the inflow of the most necessary goods and products,” Mitrova said on the sidelines of the Doha Forum in Qatar.

Washington has raised concerns about Beijing helping Moscow in the midst of the bloody but stalled invasion.

"We have not seen... the provision of military equipment by China to Russia. But of course, this is something we are monitoring closely," US National Security Advisor Jake Sullivan said.

Since Russian President Vladimir Putin launched the bloody assault on Ukraine, Western capitals have frozen Moscow out of the global financial system, tipping its currency into freefall and pushing the country to the verge of default.

But China, a longtime Russian ally, has refused to follow suit, throwing Moscow a potential economic lifeline to match the diplomatic cover it has provided by refusing to condemn the invasion.

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China is the only friend that might help Russia blunt the impact of economic sanctions over its invasion of Ukraine, but President Xi Jinping’s government is giving no sign it might be willing to risk its own access to US and European markets by doing too much.

Even if Beijing wanted to, its ability to support President Vladimir Putin by importing more Russian gas and other goods is limited.

Relations with Moscow have warmed since Xi took power in 2012, motivated by shared resentment of Washington, but their interests can conflict. Putin is uneasy about the growing Chinese economic presence in Central Asia and Russia’s Far East.

“China-Russia relations are at the highest level in history, but the two countries are not an alliance,” said Li Xin, an international relations expert at the Shanghai University of Political Science and Law.

In response to the invasion, Washington, Britain, the 27-nation European Union and other Western allies have announced or promised sanctions against Russian banks, officials, business leaders and companies, as well as export controls aimed at starving Russia’s industries and military of high-tech products.

Xi’s government might support Putin within those limits,and Chinese companies might use the situation to pursue better deals — but will balk at openly violating sanctions and being targeted for penalties, experts said.

“China doesn’t want to get so involved that it ends up suffering as a result of its support for Russia,” said Mark Williams, chief Asia economist for Capital Economics.

Chinese trade with Russia rose to $146.9 billion last year, but that is less than one-tenth of China’s total $1.6 trillion in trade with the United States and EU.

“It all hinges on whether they’re willing to risk their access to Western markets to help Russia, and I don’t think they are,” said Williams. “It’s just not that big a market.”

China, the world’s second-largest economy, is the only major government not to have condemned the invasion.

“The degree of Chinese support Russia receives is likely to prove a crucial factor in how well it can weather the long-term consequences,” wrote Kevin Rudd, a former Australian prime minister and president of the Asia Society, on the Asia Society website.

(With inputs from agencies)