Sailing together in the Indian Ocean: China-Russia weekly update

Foreign Affairs

Iran, China, and Russia are conducting joint naval exercises and have only the nicest things to say about one another. But oil and gas revenues might complicate their mutual support if Putin decides to invade Ukraine.

chinese navy ship with russia flag
The Chinese People’s Liberation Army Navy Type 054A frigate, Jiangkai II class, flying a Russian flag during naval exercises in 2019. Source: Usni.org.

Russia’s Pacific Fleet reports that Russian, China, and Iran will hold combined naval exercises on January 21.

Moscow, Tehran, and Beijing share similar perspectives on constitutional democracy but have starkly different energy interests. Assuming that Russian President Vladimir Putin invades Ukraine or otherwise escalates conflict, the three sides will face a difficult task of balancing diplomatic ties and economic interests amid whatever new energy equilibrium emerges from this crisis.

Russia’s ominous military exercises

As the world frets about Russian aggression against Ukraine, Russia and Belarus announced they will hold combined military exercises called Allied Resolve in February.

  • The first phase will see Russian military forces deploy in Belarus through February 9.
  • The second phase will purportedly take place from February 10 to 20, and will include “tasks of suppressing and repelling external aggression during a defensive operation.”
  • The Russian navy also announced it will hold exercises in “all zones of responsibility” in January and February.

The timing of the second stage may be signaling to Beijing that any substantial Russian escalation in Ukraine will not take place until (at least) the Olympic Opening Ceremony has passed.

  • Escalation dangers in Ukraine will likely peak around the Russia-Belarus combined military exercises but after the February 4Winter Olympic Opening Ceremony, when Putin and Xí Jìnpíng 习近平 will meet for a summit. The two leaders will likely use the summit to announce natural gas deals and/or the expansion of political and military ties.
  • Putin’s escalation options and Olympics attendance could be hampered by Russia’s surging Omicron cases, however. Russia’s (unreliable but directionally accurate) official results show that cases have nearly doubled in the past week.

China’s Liquefied Natural Gas sale

China’s Sinopec oil company announced a sales tender for up to 45 Liquefied Natural Gas (LNG) cargoes from February to October. Sinopec’s sale may have led European natural gas prices to decline slightly, diminishing Putin’s energy leverage.

While Sinopec’s trade was likely motivated by economics, as LNG prices are currently quite high, Beijing surely could have blocked or delayed sales to signal political support for Putin. While the LNG sale tale is far from over, it could provide hints into how Beijing would manage its complicated economic, energy, and political interests amid a second Ukraine crisis.

Click through to SupChina for the archive of China-Russia weekly updates, or see the author’s comprehensive China-Russia Report.