Russia’s relationship with Europe is…strained at the moment, and that has huge implications for the country’s budget revenues, much of which rely on the sales of oil and gas to Western customers. The conflict with Ukraine has many European policymakers prioritizing the diversification away from Russian oil and gas, which has Moscow understandably concerned. It’s no coincidence, then, that Russia has begun to accelerate a shift eastward, eyeing Asia as a new market for its prodigious reserves. As Bloomberg reports, sales of Russian oil in Asia are booming:
Russia, the world’s second biggest crude producer, boosted sales to China, Japan and South Korea by 25 percent last year, increasing its portion of shipments to 8.7 percent, from 7.2 percent in 2013, according to government data compiled by Bloomberg. Saudi Arabia accounted for 24 percent, down from 26 percent, while Qatar and Kuwait also ceded market share.
But it’s not just crude wending its way east; Moscow also signed a landmark gas deal with Beijing last May after more than a decade of haggling. Then, just six months later, the two countries inked a framework agreement to send Russian gas to China via another proposed pipeline through western China. This week Russia’s energy minister said that he’d like to see that deal finalized in the next few months.If there’s any winner here it’s China, which has managed to secure what appear to be favorable terms for Russian energy supplies; Beijing knows Moscow needs new markets. But for Putin, Asia could be a lifeline.