According to new data, Russia has surpassed Saudi Arabia as the chief supplier of crude oil, in what was considered an unlikely outcome for the battle over market share since oil prices took a tumble last year. The Chinese data, released by the General Administration of Customs, said that some 927,000 barrels per day were imported last month, a 20% increase over the previous month and a substantial amount more in year-over-year growth. By contrast, Saudi sales slumped some 42% from April to May in the key export market.

China accounts for roughly 11% of global oil demand, and new deals for exportation of crude oil between Rosneft and the Chinese government look like they are likely to be kept in place over the longer term. The Power of Siberia pipeline project will additionally create another guarantee of Russia’s market share in China over the longer term as well.

However, this overtaking may only be temporary, as even Angola surpassed Saudi Arabia in sales to China last month. The major issue clinching the payments appeared to be accepting the renminbi (RMB) as payment for barrels, instead of dollars, which oil benchmarks are universally measured in. The other issue could be that Saudi Arabia, after giving price discounts for the 1^st quarter, decided to discontinue these efforts to return to a more normal price.

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News Briefs:

• Turkmenistan’s government has announced it will select the consortium leader for the construction of the TAPI Pipeline by September 1. The contract would be for the construction of the 1,078 mile pipeline through very hostile territory in Afghanistan and Pakistan, going through hotbeds of violence like Kandahar and Quetta and finally terminating in energy-import dependent India. The project is estimated to cost a total of $10 billion, readjusted upwards from $7.5 billion.

• In response to the extension of Russian sanctions by the EU until January 2016, Russia has extended its food ban another year. The ban prohibits food imports from the US, EU, Australia, Canada, and Norway and it is unknown how committed both sides are to continuing the current state of affairs. Food prices are already at all-time high levels.

• French energy giant Total has ceded its 25% share of the Shtokman natural gas project in the Barents Sea to Gazprom. The Shtokman field is one of the largest untouched gas fields in the world, with almost 3.8 trillion cubic meters of gas. This indicates a lack of appetite on the part of European firms to take on additional risk with projects and the consistent level of acquisition by Russian firms to take over development of larger projects like Shtokman.

• Supreme Leader of Iran Ayatollah Khamenei has delineated several red lines, publicly, on the upcoming Iran nuclear deal. Most striking of all of these proclamation is his categorical rejection of freezing any nuclear R&D work for 10 to 12 years, a major stipulation of P5+1 negotiators. Khamenei also demanded the “immediate lifting” of all economic and political sanctions if an agreement is signed, another issue that has seen significant debate in the Western policymaking circles and it highly unlikely to be implemented even if a deal is signed on June 30.

• The new meetings between foreign ministers of Russia, Ukraine, France, and Germany in Minsk concerning ceasefire efforts in Ukraine ended today, with most high-level sources afterwards saying that the four parties agreed to “not allow a breakdown” of the peace deal reached in Minsk in February (called the Minsk II Accords colloquially). However, the lack of substantive progress and continued violence in Ukraine casts a shadow of doubt on what exactly European leaders through the OSCE would be able to accomplish.

• The IMF’s negotiations with the Ukrainian government over the status of its debt obligations has the financial community in an uproar. The two largest holders of debt are Russia and a consortium of funds that are both attempting to discourage a default, encourage the IMF’s bailout, and keep the government paying off its enormous debts over the long term. The IMF, despite agreeing to provide the bailout and the passage of a new law that would allow for a moratorium on debt payments, has treated Russian-held debt as official rather than private debt, which would allow for a formal haircut while still keeping cash flowing to creditors.