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China doubles down on Russian oil even as geopolitical risks explode
China is tightening its grip on discounted Russian crude just as the global energy map is being scrambled by war, sanctions and tariff threats. The country is not only buying more barrels, it is also reshaping storage, trade and diplomacy to turn that flow into long term leverage. The result is a fragile bargain in which Beijing gains cheap energy and influence while tying itself more closely to Moscow's fortunes.
China becomes Russia's indispensable buyer
Russia's fossil fuel exports have become heavily concentrated, and China now sits at the center of that trade. Recent tracking of Russian shipments shows that Russia relies on a small group of importers, with China dominating purchases of both coal and crude oil while Turkiye leads in pipeline gas. Earlier monthly snapshots show the same pattern, with Who is buying Russia's fossil fuels increasingly answered by a short list in which China dominates coal and crude flows. By late summer, that concentration had already become entrenched, with August data again showing Russia leaning on a narrow pool of buyers and China at the top of the table.
This shift has transformed the balance of power between Moscow and Beijing. Analysts describe a skewed relationship in which Beijing uses its position as the main buyer to secure steep discounts on Russian crude, turning what Moscow once called an equal partnership into something closer to dependence for China. Trade data from early 2025 underline that dynamic: overall commerce between China and Russia has surged since the invasion of Ukraine, even as Falling energy commodity imports from a very high 2024 base have slightly tempered the growth rate. I see a feedback loop taking hold: the more Western buyers step back, the more Russia needs Chinese demand, and the more pricing and political leverage Beijing can quietly extract.
Strategic stockpiles and shifting supply routes
China is not just buying Russian barrels for immediate use, it is also racing to expand storage so it can bank cheap crude for the future. In 2025, State oil companies, including Sinopec and CNOOC, set out plans to add at least 169 m barrels of storage capacity across 11 sites, a buildout that gives Beijing more room to absorb Russian flows when prices are low. Because authorities do not regularly disclose the volume held in these tanks, the true size of China's strategic cushion is opaque, which in my view adds another layer of uncertainty for global traders trying to read demand signals.
At the same time, the routes feeding China's refineries are being scrambled by sanctions and conflict. Recent analysis of Sanctions and Supply shows China's Oil Markets in Flux, with several key crude streams from OIL producers such as Russia, Iran and mainly sour Saudi grades being reshaped by restrictions and freight bottlenecks. Strategists like Hao Hong at Lotus Asset Management argue that escalating tensions from Venezuela to the Middle East are nudging Beijing to lean even more on Russian supply, a view echoed in separate remarks by Hao Hong that China will keep turning to Russian barrels even as global uncertainty rises. In my reading, the combination of new storage and volatile seaborne routes makes Russian crude both a hedge and a vulnerability for Beijing.
Tariffs, retaliation and the next phase of energy geopolitics
Into this already fraught landscape, President Donald Trump has injected a new tariff shock aimed squarely at countries that keep buying Russian oil. Under the latest policy, a new levy could push the overall rate on goods from China to a minimum 45%, far above the current 20 percent baseline, if Washington judges that Beijing is undercutting sanctions by purchasing Russian crude. I see this as an attempt to weaponize access to the US consumer market in order to choke off Moscow's energy revenue, but it also risks accelerating the very decoupling that has worried multinational manufacturers for years.
Beijing has signaled it will not sit still. Officials have warned of retaliation after the tariff threat, and Chinese commentators are openly debating whether to double down on Russian barrels or diversify more aggressively toward the Persian Gulf. Reporting notes that China, already the world's largest importer of Russian oil, is weighing a shift toward more supplies from the Gulf even as it keeps its Russian options open. In my view, that is the crux of the next phase: Beijing will try to play Russian discounts, Gulf diversification and US market access off against one another, while Moscow, squeezed by sanctions and isolated from Western buyers, has little choice but to keep offering barrels on China's terms.
