How China is scaling up Russian oil orders as Trump turns the screws on India

China is expanding its role as a leading buyer of Russian crude oil, taking advantage of shifting market conditions triggered by United States President Donald Trump’s tariff actions.

With New Delhi facing mounting costs from Washington’s trade restrictions over its imports of Russian oil, Beijing has moved quickly to secure additional shipments that traditionally flowed to India.

India emerged as one of the most important destinations for Russian oil in the wake of the Ukraine conflict. After Moscow’s invasion in 2022, European and other Western markets drastically cut their purchases, forcing Russia to reroute crude toward Asia at discounted rates.

This paved the way for India and China to become the two largest buyers of Russian supplies.

How China has ordered more Russian oil

As India has scaled back, China’s refiners have stepped in to buy additional Russian supplies. By mid-August, state-owned oil companies and major private refiners had secured at least 15 cargoes of Russian crude for October and November delivery.

Each shipment ranged between 700,000 and 1 million barrels, representing a substantial addition to China’s intake.

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Most of these cargoes will originate from Russia’s Arctic and Black Sea ports, routes that normally supply India rather than China because of logistical proximity.

Muyu Xu, senior crude oil analyst at Kpler, explained that the decision reflected an opportunity created by lower prices. Russian grades were trading at least $3 per barrel below comparable West Asian supplies.

“As for whether China will continue buying, I personally believe that right now is still a very good opportunity, because over in India, Trump is still pressing hard on them,” she said.

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Xu added that if Chinese refiners moved quickly, they could lock in further shipments before the US considered retaliatory action.

“Taking advantage of this opportunity while prices are low, I think more refineries will probably consider buying more, within a week or two,” she noted.

Richard Jones, a Singapore-based analyst at Energy Aspects, said that while China was unlikely to replace all of India’s lost demand, the additional purchases would nonetheless make a difference in the short term.

“We do not expect China to absorb all of the additional Russian volumes, as Urals is not a baseload grade for Chinese majors,” he told Reuters, referring to the type of Russian crude involved.

How Trump targeted India over Russian oil

By 2023, Russian crude accounted for more than one-third of India’s oil imports, representing 36 per cent of the total market.

United Nations trade data shows that in 2024, India imported $53 billion worth of petroleum and crude oils from Russia. In volume terms, this amounted to roughly 88 million tonnes during that year.

However, in July, Trump announced that countries continuing to buy Russian crude would face the risk of secondary tariffs. According to the White House, the move was designed to increase economic pressure on Moscow and reduce its capacity to finance the war in Ukraine.

This month the US imposed a further 25 per cent tariff on Indian goods shipped to the United States, on top of an existing 25 per cent levy, raising the total to 50 per cent. The Trump administration explicitly connected this penalty to India’s imports of Russian oil and gas.

As a result, Indian refiners have begun scaling back their purchases. Reuters citing analysts reported that New Delhi has reduced its Russian crude imports by between 600,000 and 700,000 barrels per day, a significant contraction.

State-owned refineries in particular paused new orders as discounts narrowed, while private refiners also cut back amid fears of US reprisals.

Senior figures in the Trump administration have been forthright about their position. US Treasury Secretary Scott Bessent told CNBC that India had moved from negligible levels of Russian oil imports before the war — less than 1 per cent of its supply — to sourcing around 42 percent from Russia.

“This is what I would call the Indian arbitrage – buying cheap Russian oil, reselling it as product,” he said, adding that Indian refiners had generated “$16 billion in excess profits – some of the richest families in India.”

White House trade adviser Peter Navarro also argued that New Delhi’s purchases were indirectly financing Russia’s war effort.

His colleague, deputy chief of staff Stephen Miller, echoed the sentiment earlier in the month, insisting that India’s continued reliance on Russian crude was “not acceptable.”

How the scale of China’s oil imports has increased

China has long been the world’s largest oil importer, and Russian crude plays a growing role in its supply mix. In 2024, Chinese customs data showed that the country imported 109 million tonnes of Russian crude, representing close to 20 per cent of its total energy intake.

United Nations statistics indicate that Russia’s shipments to China amounted to $62.6 billion in value that year.

Much of Beijing’s Russian crude intake traditionally comes in the form of ESPO shipments from the Far East port of Kozmino, which offers a relatively short shipping route.

Urals and Varandey grades, by contrast, usually head to India.

By August, Kpler data showed that China’s year-to-date Urals imports averaged only about 50,000 barrels per day. The sudden booking of 15 cargoes for October and November therefore marks a sharp increase from previous patterns.

Overall, China currently takes in around 1.2 million barrels per day of Russian seaborne crude. India, by comparison, had been purchasing about 1.7 million barrels per day until the recent cutbacks.

Analysts agree that China cannot entirely make up for India’s reduction, leaving Russia facing the risk of a significant drop in revenues if Indian demand does not recover.

Xu underlined this point, saying, “If India keeps holding off on buying, that’s going to be a real problem for Russia – China just can’t take on all of India’s volume by itself.”

Why Washington’s approach to Beijing differs from New Delhi

Although Beijing has increased its purchases of Russian crude, Trump has so far avoided imposing punitive measures on China similar to those directed at India. On August 15, he told Fox News that retaliatory action was not an immediate priority.

“Well, because of what happened today, I think I don’t have to think about that. Now, I may have to think about it in two weeks or three weeks or something, but we don’t have to think about that right now,” he said.

The comments came shortly after Trump met Russian President Vladimir Putin in Alaska, where discussions over a ceasefire in Ukraine broke down.

Observers believe Trump may be holding off on secondary sanctions against Beijing to preserve space for broader trade negotiations.

One of the key issues under discussion is access to rare earth minerals, a set of 17 elements critical to industries ranging from clean energy and electronics to military hardware.

China dominates global mining and processing of these minerals, giving it considerable leverage. The US, heavily reliant on imports for manufacturing, has sought to ensure continued access.

A major escalation by the US with China would risk disrupting supply chains and raising costs just as US retailers stock up on inventories ahead of the end-of-year holiday season.

Earlier this month, Trump eased restrictions on semiconductor exports, permitting Nvidia to sell advanced chips to China again, though subject to a 15 per cent levy on sales to the country.

Bessent told CNBC that China had imported around 13 percent of its crude from Russia before the war, a figure that has since risen to 16 percent.

“So China has a diversified input of their oil,” he said. He argued that Beijing had not engaged in the same form of arbitrage that India had undertaken.

How Russia is dependent on Asian markets

Moscow has become heavily reliant on Asian customers in the wake of Western restrictions. Since 1979, when the US first imposed sanctions on Iran after the Tehran hostage crisis, oil markets have frequently been shaped by geopolitical disputes.

For Russia, the fallout from the Ukraine conflict has forced a near-total reorientation of exports.

European embargoes and G7 price caps have shut Russia out of its most lucrative markets. In their place, India and China have provided vital outlets.

Together, the two countries absorbed the bulk of Moscow’s seaborne exports in 2023 and 2024, helping stabilise its revenues even at discounted prices.

China has made clear that it does not recognise US restrictions on global energy trade. Responding to questions by the Financial Times about its imports of sanctioned oil, the Ministry of Foreign Affairs in Beijing said the country has “consistently opposed illegal unilateral sanctions” that lack approval from the United Nations Security Council.

For the immediate future, China’s refiners are taking advantage of discounted Russian barrels that India has relinquished.

With inputs from agencies