China's imports of liquefied natural gas (LNG) from Russia surged in the first six months of this year, and in turn, China has been turning around and selling the product to Europe, according to new reports.
China, as the largest purchaser of liquefied pure gasoline, has been selling what The Financial Times reports as "surplus LNG" cargoes because of "weak power demand at residence," resulting in Europe's imports of LNG growing by 60% through June, analysis agency Kpler figures show.
This means Europe could reach its goal of filling 80% of its gasoline storage by November.
Meanwhile, in July, Chinese media's SCMP reported that china bought 2.35 million tons of liquefied natural gas, valued at $2.16 billion, from Russia, meaning the country has bypassed the United States and Indonesia in becoming China's fourth-largest LNG supplier.
This has resulted in China "aggressively" selling Russia's LNG to Europe, ZeroHedge's lead writer, who writes under the pseudonym "Tyler Durden," notes.
He writes that Russian producer Gazprom has recently announced its daily supplies to China through the Power of Siberia pipeline increased by 63.4% in the first half of 2022. Russia is already China's second-highest supplier of pipeline-drive natural gas, behind Turkmenistan.
The Financial Times reported that China's "financial hunch" has created a "white knight" situation for Europe, it leaves Europe dependent on Beijing for its power supplies.
Meanwhile, China's JOVO Group has disclosed that it resold a LNG cargo to a European purchaser, and a Shanghai futures dealer informed Nikkei that the revenue from that could reach as high as $100 million.
China's giant oil refiner, Sinopec Group, has also acknowledged channeling extra LNG into the worldwide market, offering 45 cargos of LNG.
Overall, there may have been more than 4 million tonnes of Chinese LNG resold, totaling 7% of Europe's gasoline imports in the first half of this year.
China typically is not an energy vendor, but Xuelian Li, a senior analyst at the Marubeni Research Institute told The Financial Times that the nation's lockdowns over COVID led to a demand for industrial fuel and chemicals, which brought about lower gas demand in the first half of the year that likely won't change in the second half.
This all points to China reselling the LNG under its name, meaning that rather than Europe buying from Russia, it's buying Chinese supply, writes Durben.
The problem with that, he said, is that when China's economy starts to return, Beijing won't re-export Russia's LNG to Europe. Also, Europe, to "virtue signal to the world" that it isn't funding Russian President Vladimir Putin and his invasion, it's paying as much as three times more to buy the supplies from China.
"The reality is he is paying extra to both Xi and to Putin, who is collecting a premium price thanks to the overall market scarcity," writes Durden.
"In the end, all Europe has done is replace one energy master with another," he added, pointing to warnings from former President Donald Trump in 2018 that Germany would become dependent on Russian energy.
But China and Russia are "joined at the hip and laughing at the stupidity of Brussels" which has "made all of this possible just in time for China, which together with Putin now determines Europe's daily energy intake, to invade Taiwan without a peep from Europe's virtuous signalers," he concludes.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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