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Page added on February 9, 2016
Russia Now China’s Biggest Oil Partner
The output of oil from Russia reached peak levels in 2015 not seen since the era of the Soviet Union. It has now edged out Saudi Arabia as the largest exporter of crude to China.
Gas prices have plummeted due to a glut of oil across the world, which is great news for consumers hoping to fuel up a car without breaking the bank.
But the low oil prices pose problems for nations whose main earnings come from oil exports. With more oil in the international market, prices continue to drop.
Market watchers have stated that oil production must shrink to fix this problem, but that would require countries that are competing economically, many of which are antagonistic towards each other politically, to strike a deal.
This situation applies most pressingly to Saudi Arabia and Russia, two of the world’s biggest oil producers that have no intention of striking a deal with each other. An international effort would require both to agree to reduce oil exports, a deal unlikely to happen.
“Russia can only coordinate with countries outside of Saudi Arabia, like Venezuela,” an anonymous Morgan Stanley managing director told CNBC. “Any cooperation without Saudi Arabia won’t lead to a production cut. Everything else is a sideshow.”
Experts expect that, with both sides refusing to cooperate, oil production will not be cut until at least 2017.
“With the possibility of a production-cutting deal quickly fading into the sunset, market participants are once again left to focus on the reality of the oversupplied global market,” wrote Energy Management Institute analyst Dominick Chirichella, according to Reuters.
The country that has been importing the largest volume of oil has been China, and Russia has hugely increased its crude output to meet that nation’s demand.
In 2010, Saudi Arabia accounted for 20 percent of China’s crude imports while Russia was only 7 percent, according to Business Insider.
In 2016, both countries are heavily competitive in exporting to China. Commodity strategist Michael Tran observed that Saudi Arabia “finds itself neck and neck with Moscow for the lead in Chinese market share, with both jostling in the 13-14 percent range, yet the momentum resides with the latter.”
This has put pressure on Saudi Arabia, but Russia may not have the last laugh.
Columbia University professor Robert Legvold told CNBC that Russia is mining as much of its oil resources as it can to compensate for the plummeting value of its currency and constricting international sanctions. At this rate, Legvold observed, “Russia’s existing developed reserves may be tapped out at this rate within two years.”
28 Comments on "Russia Now China’s Biggest Oil Partner"
JuanP on Tue, 9th Feb 2016 5:55 pm
I think it makes a lot of sense for China to buy as much oil and gas as possible from Russia, and get them delivered through overland pipelines. This is good for Russia, too. As the globalized world relocalizes and global war erupts, regional land trade will be safer and more advantageous than intercontinental or long distance sea trade.
It is strategically important for China to have energy supplies that can’t be blocked or attacked by the US Navy. A pipeline going from Russia to China is safer than a ship sailing from KSA to China in a world where the USA militarily dominates the seas.
Truth Has A Liberal Bias on Tue, 9th Feb 2016 6:26 pm
Saudi crude production has been decreasing every month for 6 months. This notion that Saudi is increasing production was true up unti mid 2015. Saudi production in December 2015 is back to where it was in mid 2013 or so. The only OPEC member with big production gains is Iraq and they’ve been on a bumpy plateau for a few months.
Boat on Tue, 9th Feb 2016 7:08 pm
JaunP,
You are so naive. There is not a square inch on earth that would not be in range of many countries. You need to read up on the worlds fighter jets and bombers. The US has and will dominate the air with it’s allies. In tech and shear numbers.
makati1 on Tue, 9th Feb 2016 8:18 pm
And, the deal will be paid for in rubles and yuan, not dollars. OUCH US! LMAO
makati1 on Tue, 9th Feb 2016 8:25 pm
Boat, have you heard about the S-400 and S-500 that Russia is selling to the countries that want to keep the Empire out of their skies? Even the US military admits that it is better than anything the Us has by far. And China’s carrier killer missiles can keep the carriers at least 1,000 miles from China’s shores. Ditto Russia. They keep the admirals up at night.
So, how is the paper tiger US gonna win? Thy haven’t won a war in over 100 years. Besides the fact that they and their allies (NATO) are bankrupt and their military becoming obsolete.
For 14 years and almost $1 Trillion spent so far, the US has been developing the F35 and it still doesn’t work. Meanwhile they are scrapping the old F16s that do. That’s what happens when you have huge graft and corruption in your government and military industrial complex. LMAO
Truth Has A Liberal Bias on Tue, 9th Feb 2016 8:35 pm
Russia is not so far as I know offering to sell the S-500. They’ve recently started offering to sell the S-400 to China which indicates they probably have the S-500 operational but they’ll keep it to themselves for a bit.
GregT on Tue, 9th Feb 2016 9:28 pm
“The US has and will dominate the air with it’s allies. In tech and shear numbers.”
You’ve set a new, and even lower bar for yourself Boat. Fuck are you dumb.
makati1 on Tue, 9th Feb 2016 10:15 pm
Truth, true, but how long before they are selling then as they will have developed the S-600? Or, maybe they already have.
Boat on Tue, 9th Feb 2016 10:36 pm
mak,
Did you know China sold their missile systems to the Saudi who will now use them against Russia in Syria? Funny world we live in.
sidzepp on Tue, 9th Feb 2016 10:42 pm
When the missiles start flying does it really matter who has the most or the best. “Put you heads between your knees and kiss you ass goodbye!”
Boat on Tue, 9th Feb 2016 11:09 pm
sidzepp,
Of course it matters who has the most and best. These are not yesterdays scud missiles. They are very accurate and much more destructive. Importantly who has the money for a long war.
GregT on Tue, 9th Feb 2016 11:50 pm
“Importantly who has the money for a long war.”
All of the money in the world makes no difference, without energy and resources.
Truth Has A Liberal Bias on Wed, 10th Feb 2016 1:01 am
Hey boat, news flash- US military sucks! You haven’t won a war since Panama. Stick to invading lightly populated small tropical islands like Grenada and you might do ok.
http://www.thenation.com/article/everyone-knows-the-us-military-is-failing-so-why-wont-washington-bring-the-troops-home/
makati1 on Wed, 10th Feb 2016 5:22 am
Boat, did you know that they are inferior to the S-400? Not to mention that Russia is not going to invade Saudi Arabia and the Saudis are not going to use them in Syria, they want them to keep the Iranian missiles out of the KSA. Don’t know where you get your ‘news’. OH, maybe from the US MSM propaganda ministry.
Stephen Leeb on Thu, 11th Feb 2016 12:50 pm
The basic question is who wins and who loses. Shale producers lose but that is small beer. The big loser is Russia, the big winner is China. Back of envelope calculation suggests China has probably accumulated well over a billion barrels of oil since 2014. At the same time Russia is sharply overproducing current reserves and will need China’s money to ramp up. China had planned to start trading a new benchmark denominated in Yuan last year, but Russia started trading their own benchmark.Thus China has temporarily delayed their plans – an annoying and temporary setback. I expect to find China an integrated oil hub for the East withing the next 18 months. N.B. private oil refineries have recently been granted permission to import from foreigners.We live in interesting times.
marmico on Thu, 11th Feb 2016 2:12 pm
Russia and China are connecting with natural gas pipes this decade. Oil pipe connections will be in the 2020s.
https://www.rt.com/business/270352-russia-china-gas-pipeline/
The small beer U.S. LTO producers can export LNG to Europe because of a comparative advantage (distance) over the Australia and New Guinea LNG exporters.
Apneaman on Thu, 11th Feb 2016 2:43 pm
marmi-noon, remember a while back when you were predicting el nino was going to bail out your california drought and I told you that the drought is permanent and the pain has just begun? Could be as little as a few years when you join the ranks of global climate refugees. All raggedy asses and staggering into Seattle begging for a hand out.
Even a Monster El Nino Can’t Beat the Southwest Drought
“And so the seemingly impossible has happened. A powerful El Nino’s rains and snows — usually bound directly for California, Oregon and Washington — have been diverted by a new kind of atmospheric pattern associated with climate change.”
“It’s all just terrible timing. First, California snow packs during December and January began to recover due to strong, El Nino associated, storm systems barreling in. However, now during what should be the peak of the Southwestern rainy season, we have what could be a month long pause in storms hitting the region. It’s as if the rainy season is being hollowed out. And not just any rainy season — a strong El Nino rainy season which should have been far, far rainier than most.
Last week, Climate Central and Peter Gleick — a climate expert at Pacific Institue — made the following warning:
…seven days of sustained warmth could melt as much as 30 percent of California’s snowpack. The hot, dry weather is exactly what baked in exceptional drought in California over the past four years. Some signs indicate the heat is driven in large part by climate change, but the role of the ridiculously resilient ridge is still an area of active investigation.
Well, by tomorrow seven days will have come and gone. But the end to the anomalous warm, dry spell is still nowhere in sight.”
http://robertscribbler.com/2016/02/10/even-a-monster-el-nino-cant-beat-the-southwest-drought/
Boat on Thu, 11th Feb 2016 2:45 pm
mak,truth,
The US military doesn’t operate like Hannibal or Genghis Kahn. The US is not interested in taking territory. They are not interested in tasking out entire populations. They showed with Iraq they have the capability of destroying a countries military infrastructure within a couple weeks. At the time Iraq has one of the worlds largest militaries. These are just plain simple facts. You continue to underestimate the power of a 600 billion per year military while trump up the power of a 70 billion per year military. You have become the cornucopian of military capabilities for China and Russia and lack the ability to access stark facts on the ground.
marmico on Thu, 11th Feb 2016 3:12 pm
marmi-noon, remember a while back when you were predicting el nino was going to bail out your california drought
I don’t make climate change predictions. Nony lives in San Diego. Why don’t you lend him some money so he can buy an unobstructed view La Jolla cliff house on Coast Road at Torrey Pines for $10 million instead of being a doom and gloom circle jerker aka lunatic.
http://www.zillow.com/homes/for_sale/La-Jolla-San-Diego-CA/pmf,pf_pt/79569928_zpid/46087_rid/any_days/32.891047,-117.170649,32.804806,-117.338877_rect/12_zm/?3col=true
Apneaman on Thu, 11th Feb 2016 3:22 pm
Boat, the US are only good for destroying and have not achieved any objective since WWII. It’s more like at least a trillion a year BTW. Wasted money as far as it goes for the average American is concerned. Who the fuck cares how much money you spend anyway? The Russians have 7700 nuclear weapons, 700 more than you. Do you think they will just sit on their hands forever while the evil empire rolls over them? Also you are living in the past. The weak link is cyber and both the Russians and Chinese are just as capable and maybe even more so than Americans at cyberwarfare. Fuck, anyone with a small army of skilled hackers has the potential to get lucky and take the beast down or do serious damage. Most importantly boat, the US is the incompetent nation. Fuck ups are the rule.
A Record of Unparalleled Failure
“The United States has been at war — major boots-on-the-ground conflicts and minor interventions, firefights, air strikes, drone assassination campaigns, occupations, special ops raids, proxy conflicts, and covert actions — nearly nonstop since the Vietnam War began. That’s more than half a century of experience with war, American-style, and yet few in our world bother to draw the obvious conclusions.
Given the historical record, those conclusions should be staring us in the face. They are, however, the words that can’t be said in a country committed to a military-first approach to the world, a continual build-up of its forces, an emphasis on pioneering work in the development and deployment of the latest destructive technology, and a repetitious cycling through styles of war from full-scale invasions and occupations to counterinsurgency, proxy wars, and back again.
So here are five straightforward lessons — none acceptable in what passes for discussion and debate in this country — that could be drawn from that last half century of every kind of American warfare:
1. No matter how you define American-style war or its goals, it doesn’t work. Ever.
2. No matter how you pose the problems of our world, it doesn’t solve them. Never.
3. No matter how often you cite the use of military force to “stabilize” or “protect” or “liberate” countries or regions, it is a destabilizing force.
4. No matter how regularly you praise the American way of war and its “warriors,” the U.S. military is incapable of winning its wars.
5. No matter how often American presidents claim that the U.S. military is “the finest fighting force in history,” the evidence is in: it isn’t.
And here’s a bonus lesson: if as a polity we were to take these five no-brainers to heart and stop fighting endless wars, which drain us of national treasure, we would also have a long-term solution to the Veterans Administration health-care crisis. It’s not the sort of thing said in our world, but the VA is in a crisis of financing and caregiving that, in the present context, cannot be solved, no matter whom you hire or fire. The only long-term solution would be to stop fighting losing wars that the American people will pay for decades into the future, as the cost in broken bodies and broken lives is translated into medical care and dumped on the VA.”
http://www.tomdispatch.com/post/175854/tomgram%3A_engelhardt,_a_record_of_unparalleled_failure/
onlooker on Thu, 11th Feb 2016 3:46 pm
thank you AP once again for pointing out the futility of the Empires over reach militarily and how the legacy is only destruction and chaos and ruined health and lives.
Boat on Thu, 11th Feb 2016 7:43 pm
apeman,
Numbers of nuclear weapons matters little when the damage to the planet by just a few is so obvious. In the 60’s the US had over 30,000 such weapons but a little common sense has dropped that number to around 1,500. Even that number is a waste. Even a few dozen is unthinkable fire power. You spend to much time on Russian MSM if you think large numbers of nukes somehow gives you more influence.
onlooker on Thu, 11th Feb 2016 8:00 pm
Boat, I think that is what AP was referring too, that all the US military might will not protect it come a nuclear war. Nuclear means the end pretty much of everything.
GregT on Thu, 11th Feb 2016 8:08 pm
“Nuclear means the end pretty much of everything.”
As does a runaway greenhouse event. Which we may very well have already triggered.
Apneaman on Thu, 11th Feb 2016 10:08 pm
Boat, I don’t read Russian and I hate google translator, so I don’t read the Russian MSM. You’ve never heard of the people I read who write about Russia,
onlooker on Fri, 12th Feb 2016 1:53 am
It sure looks like it considering all the methane trapped in the Arctic and how much that area has warmed and is now showing signs of release of that methane Greg.
Apneaman on Fri, 12th Feb 2016 2:33 am
onlooker, the thing is that it’s happened before – and fast. Faster than anyone thought possible even ten years ago (there’s a pattern). Core samples show a major shift, leading to massive methane releases happened within only 50 years. Looks like it’s happening again. So when did the 50 years start this time? Decades ago IMO.
“New research from UC Santa Barbara geologist James Kennett and colleagues examines a shift from a glacial to an interglacial climate that began about 630,000 years ago. Their research demonstrates that, although this transition developed over seven centuries, the initial shift required only 50 years.”
“One of the most astonishing things about our results is the abruptness of the warming in sea surface temperatures,” explained co-author Kennett, a professor emeritus in UCSB’s Department of Earth Science. “Of the 13 degree Fahrenheit total change, a shift of 7 to 9 degrees occurred almost immediately right at the beginning.”
“What process can possibly push the Earth’s climate so fast from a glacial to an interglacial state? The researchers may have discovered the answer based on the core’s geochemical record: The warming associated with the major climatic shift was accompanied by simultaneous releases of methane — a potent greenhouse gas.
“This particular episode of climate change is closely associated with instability that caused the release of methane from gas hydrates at the ocean floor,” Kennett said. “These frozen forms of methane melt when temperatures rise or pressure decreases. Changes in sea level affect the stability of gas hydrates and water temperature even more so.”
– See more at: http://www.news.ucsb.edu/2015/016158/dissecting-paleoclimate-change#sthash.rx60OOAg.dpuf
onlooker on Fri, 12th Feb 2016 4:11 am
Actually AP, these methane deposits in the Arctic especially ESAS. East Siberian Arctic Sea, is particularly vulnerable as it has been destabilizing now for thousands of years and because of the fact that the waters there are so shallow. So the methane is just under the increasingly porous permafrost that has we speak is melting ever more. If even a portion of this methane escapes it would almost immediately interact with the atmosphere and most likely lead to a abrupt rise in temperatures. The deeper water column could have helped to dissolve this methane but that is not the case unfortunately. Already, from Russian scientists and other directly studying the area are distressing signs like many methane plumes indicating beginning phase of massive release. All this meaning something similar to what you linked. We are screwed.