Treasury Secretary Janet Yellen said on Thursday that China’s action toward Russian fuel couldn’t weaken the impact of financial sanctions against Russia.

She said, “China does buy Russian oil, but I think that our sanctions are limiting Russia’s ability to sell to China and other countries”.

According to the Treasury chief, Chinese organizations that do business in dollars and euros act cautiously not to breach the sanctions. For others, especially semiconductor companies, the U.S. would lookout if they try to get around the restrictions.

Further to the SWIFT sanctions, the U.S. and the U.K. ban Russian oil imports. The European Union also plans to cut Russian gas imports by two-thirds this year. The moves will hit a critical source of revenue for the Kremlin but could significantly affect European countries that heavily depend on Russian energy at the same time.

Instead of joining the West and the U.S., China strengthened its cooperation with Russia, including promoting yuan settlement trade contracts and using China’s Cross-border Interbank Payment System (CIPs). Beijing also intended to expand its stakes in Russian energy companies.

According to Bloomberg, Beijing tells its state-owned firms to find any opportunities for potential investments in Russian companies or assets, including Aluminum Corp. of China and China Minmetals Corp, China National Petroleum Corp. (CNPC), and China Petrochemical Corp. Among them, some petro firms are in the first talks stage with Russian energy companies.

Bloomberg reported that the plan was based on intensified energy and food security.

The move from China comes as Western companies are abandoning the Russian market. Oil giants such as BP, Shell, and Exxon Mobil walked away, getting rid of their billion-dollar investments in the Russian energy industry.

China did invest in the Russian energy sector before, with CNPC having a 20% investment in the Yamal LNG and a 10% stake in Arctic LNG 2. China National Offshore Oil Corporation (Cnooc Ltd.) also has a 10% stake in Arctic.

Still, the Treasury Secretary affirmed that China’s actions were not “meaningfully offsetting or lessening” sanctions pressure on Moscow.

Sign up to receive our latest news!

By submitting this form, I agree to the terms.