According to Bloomberg China imported a record 3.92 million metric tons from its northern neighbor in May, according to data emailed by the Beijing-based General Administration of Customs on Tuesday.
That’s equivalent to 927,000 barrels a day, a 20% increase from the previous month. Saudi sales slumped 42% from April to 3.05 million tons.
What’s more: The Kingdom fell to third place behind Angola, which sold 3.26 million tons to China, up 14% from April.
As China’s been itching to move away from the dollar in favor of its own currency, some analysts attributed the change in top supplier to Russia’s willingness to play along.
“Following Russia’s recent acceptance of the renminbi as payments for oil, we expect more record high oil imports ahead to China,” Gordon Kwan, the Hong Kong-based head of regional oil and gas research at Nomura Holdings Inc., said.
“If Saudi Arabia wants to recapture its number one ranking, it needs to accept the renminbi for oil payments instead of just the dollar.”
This is the first time that Russia is China’s top crude supplier since October 2005. After disagreements with the West over Ukraine, Moscow turned its gaze, and commodities, eastward as it looked for new markets.
Back in 2013, Russian state oil company Rosneft agreed to supply 365 million tons over 25 years to China National Petroleum Corp. under a $270 billion deal. Further, Rosneft agreed on a $85 billion, 10-year deal with China Petrochemical Corp, according to Bloomberg.
But it’s important to note that despite all the Sino-Russo fanfare, energy-starved Beijing is ultimately after the best deals. It is not buying from Russia simply for some ideological reason.
“Russia is using its good relationship with China to increase supplies and has now taken the top spot,” Gao Jian, an analyst at SCI International, a Shandong-based energy consultant Said.
Source: Business Insider