Putin Searches For Trading Partners
Russia is looking to Asia to reinvigorate trade after it has alienated much of the Western world based on its actions in Ukraine. Russia has begun talking about expanding its trade with China, which could do two things for both countries: it could expand trade for both of their economies and it could improve a relationship that has become tense over the past few years.
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The Kremlin’s calculations rely heavily on China — already the second largest importer of Russian goods and a voracious energy consumer.
Increased Russian reliance on China would be helped along by a thaw in relations between Moscow and Beijing in recent decades. The countries share a border, often team up on U.N. Security Council votes and frequently trade military equipment.
Should the West pursue new sanctions to isolate Russia — possibly in response to further incursions into Ukraine — those ties will be put to the test. Moscow could also widen the search for support to Japan and India.
Russia sends more than 7 million barrels of oil a day to the world markets, and its total energy trade earns 70% of its $515 billion in annual export revenue, according to the U.S. Energy information Administration.
It has long pursued a natural gas deal with China, but a final agreement between state-owned behemoths Gazprom and China National Petroleum Corp has been delayed by a disagreement over pricing.
Now, Russia may be willing to accept a lower price in exchange for the security of having another dedicated buyer for its gas. Elsewhere in Asia, Russia could pursue additional business with South Korea and Japan, two traditional U.S. allies that are also big energy importers.