Expanding Plans for Sino-Russian Trade
Putin revives sanctions-evading trade routes with new top trade partner China
Mobius Intel Brief:
Western sanctions on Russian energy exports have effectively subsidized Moscow’s deeper ties with Asian import markets (China) to the detriment of core OPEC, EU, and U.S. GDP. Russia notched its twelfth month as China’s top crude supplier in April, and Russian President Vladimir Putin’s recent trip to China progressed plans for the Power of Siberia 2 gas pipeline. Simultaneously, Putin revived hopes for an oil pipeline along the same route. If executed, Sino-Russian trade would benefit from multiple routes of direct access without the threat of sanctions or other geopolitical disruption.
Sino-Russian Trade: Gas, Oil, and Goods
Russia’s forced extrication from most Western energy markets has incentivized an expansion in trade with Asian nations beyond the reach of most EU and U.S. sanctions. China has emerged as the clear target of Russia’s future trade plans within Asia, particularly as China faces similar tensions with Western governments.
Since Russia invaded Ukraine, Sino-Russian trade values have grown from an average of $108.6 billion in 2018-2020 to over $240 billion in 2023, notching an annual growth rate of nearly 31% from 2021 to 2023.
Moscow has proposed several initiatives in 2024 to boost direct-to-China trade infrastructure to handle natural resource exports and manufactured imports.
In March, Russian President Vladimir Putin outlined plans to increase rail capacity on the Trans Siberian and Baikal-Amur Mainline from approximately 173 million metric tons in 2023 to 255 million metric tons by 2032.
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