As the world’s largest crude importer, Beijing has long relied on discounted Russian and Iranian barrels to strengthen its supply diversity. State giants like PetroChina, Sinopec, CNOOC, CNPC, enthusiastically embraced those discounts. Yet growing U.S. and European pressure has forced China to pull back from many purchases routed through Singapore intermediaries. Direct buying from Rosneft or Lukoil has largely paused, though roughly 1.4 million b/d still arrive via Siberian pipelines, with independent refiners continuing to seek attractive barrels. A newly signed LNG deal with the US underscores how much China risks if it openly breaches sanctions.
Ambitions for a New Asian Pricing Umbrella
Leaders in Beijing, Shanghai, Tianjin, and Hong Kong are expressing deep dissatisfaction with current global pricing benchmarks. China wants greater influence, possibly through a Hong Kong-based energy exchange, with Aramco as a possible major shareholder, linking future crude and LNG purchases to EPC and infrastructure contracts in the Mideast region for Chinese firms.
IEA’s Sudden Shift
The IEA’s latest course correction reflects internal politics. Having alienated both Saudi Arabia and the U.S., the agency is recalibrating. Maintaining credibility with its biggest members has historically often determined the IEA’s analytical direction.