Energy hungry China has used the Russia and Ukraine hostilities to secure itself a natural gas deal with Russia, much to the frustration of the U.S.
A report by financial services company, The Motley Fool, spells out that while the U.S. tried to take the high-ground with foreign policy regarding Russia, China saw a deal in the making amongst the conflict of the people. How so?
“PetroChina’s state-run parent company, China National Petroleum, or CNPC, was the first oil company to secure a contract in the Iraqi oil fields following the fall of Saddam Hussein,” wrote The Motley Fool. “With Russia and the West at a standstill over the recent events in Ukraine, it appears that CNPC is about to seal another energy coup.”
China has been trying to secure a gas deal with Russia for 10 years now, but neither have come to an agreement on price before. Now with Europe looking elsewhere for energy sources due to the Ukraine conflict, Russia is looking to the East for a sale, and China will get the price it’s been waiting for.
Putin’s heading to China in May and the deal will be done, with Putin likely agreeing to a China-pleasing price. Putin will probably feel the heat from the potential loss of the European market and China knows this.
China imports over 40 percent of its natural gas, taking over the U.S. last year as the largest oil importer.For the U.S., it’s a frustrating move, which can be seen as undermining foreign policy.