China's economic gains from purchasing Russian oil
China has saved $20 billion on purchases of Russian oil since 2022 due to discounts provided by Moscow after the start of the war in Ukraine. Russia became the largest oil supplier to China, accounting for about 20% of energy imports. In 2024, Russia will account for nearly 19% of China's energy imports, totaling approximately $100 billion.
The maximum discounts on Russian oil reached 16% in the summer of 2022, significantly impacting China's economic gains. At the same time, the average discount for Chinese clients decreased to 5% off the Brent price by the end of 2023. The discount for the Far Eastern ESPO grade was $9.5 per barrel, compared to $4.2 at the end of October.
Benefits for other countries and implications for Russian oil companies
Besides China, India also benefited from discounts, saving $12.6 billion on purchases of Russian oil between 2022 and 2025. However, discounts for India and China could cost Russian oil companies $33 billion. Igor Sechin noted that China achieved such an 'economic effect' due to 'the higher efficiency of purchasing Russian oil compared to Middle Eastern alternatives.'
“China achieved such an economic effect due to the higher efficiency of purchasing Russian oil compared to Middle Eastern alternatives.”
Igor Sechin
This development demonstrates how geopolitical changes impact global energy markets. The price drop for Russian oil, resulting from international sanctions and restrictions, allowed China and India to strengthen their positions in the market while causing losses for Russian oil companies. In the long term, this may lead to changes in the structure of energy supply and a reevaluation of energy security strategies by importing countries.