China earns substantial profits from reselling Russian natural gas, with individual shipments yielding as much as $40 million.

Bild: Global Energy Shortage Benefits China from Russian Natural Gas

China purchases Russian pipeline natural gas at approximately $250 per thousand cubic meters and resells it as liquefied natural gas (LNG) to Asia at around $830 per thousand cubic meters, with potential profits reaching up to $40 million per shipment.

Since the beginning of this year, China has resold at least 1.31 million tons of LNG (totaling 19 shipments):

- 10 shipments sent to South Korea

- 5 shipments sent to Thailand

- The remainder delivered to Japan, India, and the Philippines

The reason for the surplus gas supply is:

- Weak domestic demand in China, with reduced industrial energy consumption

- End of the heating season

- Stable pipeline gas supply and consistent domestic natural gas production, allowing excess volumes to be exported

Reasons for China’s gains:

1. Long-term, low-price contracts signed with Russia

2. After losing the European market in 2022, Russia has become increasingly dependent on China

3. Chinese vessels can pass through the Strait of Hormuz, while many countries are effectively restricted due to tensions with Iran, making China a relative beneficiary of this crisis.

Original source: toutiao.com/article/1861404208427008/

Disclaimer: The views expressed in this article are solely those of the author.