China Proposes Selling Oil to Europe to Replace Nord Stream Gas

The Chinese government-run newspaper Global Times speculated on Thursday that China has the capacity to export refined oil to Europe as a means of replacing the lost natural gas that would have come in from the broken Nord Stream pipelines in the Baltic.

The two pipelines – the functional Nord Stream 1 and controversial, but ultimately never used, Nord Stream 2 – suffered a series of “leaks” this week rendering them inoperable. The countries in control of the maritime territory where the leaks happened published footage of underwater eruptions of natural gas left over in the pipelines from when they were on this week, warning ships to avoid the area given the strength of the force churning the waters.

The pipelines connect Europe to Russia, which had risen to dominate Europe’s fossil fuel supply prior to the escalation in February of the eight-year-old invasion of Ukraine. Authorities stated this week that Nord Stream 1 was not in use when the leaks were first identified but warned that the damage is significant enough that Europe will likely receive no natural gas from Europe through the pipelines this winter, raising concerns regarding the price of heating, or even availability of fuel to heat homes at all. Some reports have speculated that the pipelines may not be repairable at all.

Nord Stream 2 was never put in use despite left-wing American President Joe Biden lifting sanctions last year on the project, over the objections of Ukrainian President Volodymyr Zelensky, imposed by former President Donald Trump. Russia had halted natural gas sales to Europe through Nord Stream 1 in response to European sanctions tied to the Ukraine war at the time of the leaks.

At press time, authorities have not found a clear explanation for what damaged the pipelines, though the governments of multiple European states have insisted that explosions preceded the leaks and the damage appears to be the product of intentional sabotage. Both Russia and its enemies have accused each other of orchestrating an attack.

The Chinese Communist Party, which is one of Russia’s top allies on the world stage but has nonetheless refused to endorse the invasion of Ukraine, has not weighed in officially through its Foreign Ministry on the situation. Through the Global Times mouthpiece, however, Beijing has openly speculated that it has much to gain from a potential role replacing fuel lost to the pipeline damage.

“As the EU has struck a deal to ban most Russian oil imports, Europe has to look for other sources as it increases its imports, experts said, adding that China, with sufficient spare capacity, could be one of the sources,” the Global Times reported on Thursday. “China has an advantage in exporting refined oil products because it has excess capacity and high refining efficiency compared with other countries, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.”

The state newspaper noted that, according to government statistics on the country’s crude and refined oil supplies, China has “sufficient inventory and spare refining capacity” to aid Europe. It seemed to suggest that doing so would require China to significantly increase prices on the oil, however, in the face of “volatility” in the oil market and in the overall situation in Europe. In contrast, the Chinese state is used to shipping its excess oil to poorer countries in Southeast Asia, which is less expensive and takes less time.

“Enterprises need to weigh the benefits to the economy of higher exports against operational challenges brought by volatility in crude prices,” the expert cited in the piece, Lin Boqiang, explained. “At present, oil prices are high and domestic refineries face the risk of falling oil prices after refining.”

The Global Times previously weighed in on the situation by shrugging off the possibility of the public ever knowing how the Nord Stream leaks began, calling it a potential “forever mystery” while overtly blaming the United States for allegedly bombing it. The Global Times also notably, however, referred to the leaks repeatedly as an “accident,” a word that none of the actors involved had so far used to describe it.

While not discussing it in response to the leaks this week, the state newspaper had repeatedly reported on Chinese government efforts to persuade European countries to replace Russian oil and gas with Chinese-made “renewable” energy products, such as wind turbines and solar panels. China has invested heavily in an industry designed to get Europe to “transition” to Chinese dependence for energy away from dependence on Russia.

Just as Chinese officials have abstained from supporting Russia’s invasion of Ukraine – Vladimir Putin has publicly admitted to some tensions with China over “concerns” about Ukraine – the little that Beijing has remarked on the leaks has not dismissed the possibility of Russian sabotage, nor has China dismissed Russia’s role in exacerbating tensions with Europe.

“The Russia-Ukraine conflict shows no sign of easing largely due to a lack of diplomatic efforts by, and political will of, countries involved to help the two sides resolve their differences,” Chen Weihua, a prominent misogynist editor for the state-run China Daily newspaper, wrote in a column on Friday. Chen appears to have deliberately failed to exempt Russia from this criticism.

“The suspected sabotage of Russia’s Nord Stream pipeline, detected on Monday, is still being investigated. Yet those responsible for the alleged sabotage might have caused a major escalation in the conflict,” Chen continued. “The implication of the incident is serious … I’m saying this because the countries involved seem to have become blind to reason and less compromising.”

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