China Enjoys Energy Bonanza As NATO Sanctions Against Russia Fail

There has been a considerable amount of disinformation and delusion when it comes to the Russian offensive in Ukraine as well as the subsequent western sanctions.  For around six months the public has been told that Russia is on the verge of defeat or economic collapse, and each subsequent month the predictions end up false.  The primary reason for this disconnect is mainstream media bias infecting the observable data, or hiding the data completely.

The forecasts were all wrong.  Only two months ago media pundits were still calling for an imminent fiscal implosion in Russia; instead there has been an explosion in Russia’s energy export profits and profits in resource markets.  While Russia is in fact set to see a decline in GDP this year, the size of the predicted drop continues to shrink as we close in on the fourth quarter.  

As Putin and China’s Xi meet this week, all eyes are on the details of any agreements made for the coming fall and winter.  While some are suggesting (or rather hoping) that China will abandon its economic ties to Russia helping to cripple their ability to project military power, this is highly unlikely.  For now, China is enjoying an energy windfall partly due to continued western sanctions on Russia that have driven up global prices but made Russian oil and natural gas affordable in comparison.  China is eating up as many discount energy exports as they can get and even selling some of the excess to the west.

China is currently playing the role of middle-man in the Natural Gas (LNG) market as they purchase stockpiles from Russia and then sell at a markup to some European nations.  China has been developing an energy surplus for the past two years at least, in some cases by rationing power resources and stockpiling oil.  While mainstream analysts have been predicting an energy “crunch” for the exporter nation due to droughts affecting hydro-power, it would seem this is not the case given their current resale side business.    

It’s possible that China was indeed on the verge of energy shortages during the height of the covid lockdowns, but western sanctions against Russia have created an overflowing supply for any nation willing to defy NATO.  

The relationship between Russia and China was once treated as weak at best, with many suggesting that the two nations could even go to war with each other over resources in the near future.  The peripheral nature of their relationship changed not long after the crash of 2008 when they began a quiet program of bilateral trade that cut out the dollar as a reserve currency.  This has now grown into a full fledged anti-dollar agreement and big business for the Chinese Yuan as Russian companies issue Yuan denominated bonds.

https://markets.businessinsider.com/news/currencies/russia-companies-go…  

The question is, how far will this cooperation go?  With Russia and China engaged in joint military exercises around Japan and Taiwan, it would appear that it goes far.  The Ukraine and Taiwan conflicts act much like a smokescreen for a much bigger development in the form of an eastern alliance between one of the world’s biggest resource exporters and one of the world’s biggest manufacturing hubs.  And, almost no one in the western media is talking about the potential consequences of this merger.