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Dr. Erica Downs testified before the U.S.-China Economic and Security Review Commission on China-Russia Energy Relations. A summary of her testimony is below.

Summary

  • The China-Russia energy relationship is arguably more robust than it has ever been. Russia is China’s largest supplier of crude oil imports on an annual basis, a position it has held since 2016. In addition, Russia is set to become a major source of natural gas for China as new export projects come online and ramp up to full capacity.
  • These deepening energy ties are the product of three factors: complementary Chinese and Russian energy strategies, China’s strategic provision of capital to Russian energy companies facing financial difficulties to secure oil supply contracts and support the development of Russian energy export infrastructure, and the emergence of new Chinese oil traders with appetites for Russian crudes.
  • The substantial increase in Russia’s crude oil exports to China over the past decade and the expected growth in Russia’s natural gas exports to China over the next decade has not prevented the United States from selling crude oil and LNG to China. However, a protracted USChina trade dispute might spur China to import more Russian natural gas, which would reduce China’s demand for LNG imports.
  • Energy is emerging as an area where China-Russia cooperation is complicating the exercise of US power in the world. Not only is Chinese support for the development of Russian energy export infrastructure blunting the effects of US sanctions on Russia, but Beijing and Moscow also regard energy cooperation a way to counter other US actions inimical to their interests.