Two major oil producing countries, Russia and China recently partnered and completed the first oil pipeline linking the two nations. This pipeline is beneficial to both countries, as Russia will now have export outlets and China will be gain from high transit fees of Middle East oil producers.
The first of its kind connecting the two nations, the Eastern Siberia-Pacific Ocean (ESPO) pipeline enable Russia to increase exports to the Asian market and it helps China diversify crude oil supply and regulate oil prices. The completion of this pipeline has also led to proposed joint refining programs between Russia and China.
This new trend will provide leverage to Russia in increasing its exports to potential countries such as Vietnam, South Korea and Japan. As George Haligua, Chairman and CEO of GHC Eastern, stated “This this new era of energy cooperation is opening new possibilities for Russia’s oil and gas exports; at the same time it also paving the way for Asian countries to participate in oil development to meet the increasing demand for oil and gas worldwide.”
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