Yukos Problems To Dominate Wen Russia Visit
Yukos's claim that it is unable to deliver oil to China
will put renewed pressure on Chinese-Russian trade and
political ties. Chinese premier Wen Jiabao is to begin
a trip to Russia on Sept. 23, and this will be one of
the top topics on the agenda. Yukos has claimed that it
is unable to make its contract commitments to China because
its accounts have been frozen by the Russian government.
Beijing urged Moscow to pressure embattled oil giant
Yukos to honor its commitments to provide China with oil
after the company said it was slashing supplies. In an
unprecendented action, the Chinese foreign ministry spokesman
urged the Russians to take action to deliver oil to China.
"No doubt, we hope the (Russian) company can honor its
agreement with the Chinese company and will deliver its
promise to export the oil," said foreign ministry spokesman
Kong Quan.
Yukos is Russia's sole direct supplier to the Chinese
market and it announced Monday a suspension of all deliveries
to China National Petroleum Corp (CNPC).
The Chinese government avoids commenting on the domestic
affairs of other countries, but in the Yukos case, Russian
domestic affairs have had an effect on the Chinese economy.
Because of tight international supplies, the price of
oil surged to US$47 on the Yukos news. Earlier in the
year, Russian courts had ordered Yukos to stop international
shipments, but the courts quickly backtracked when
they were faced with a strong international reaction in
the world's oil markets.
While the Chinese government has been largely sympathetic
with President Putin in his political goals and his war
against Chechnya terrorists, the oil issue has become
a major headache for the Chinese, which has had to deal
with falling domestic oil production, and a surge in domestic
energy demands.
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