Your Wednesday Briefing: Asia buys up Russia’s oil

June 22, 2022

By Matthew Cullen

Good morning. We're covering surging demand for Russian oil in Asia and China's collapsing property market.

The Yang Mei Hu oil products tanker moored at a crude oil terminal in Nakhodka, Russia, this month.Tatiana Meel/Reuters

Asia buys up Russian oil

A surge in demand from Asia for discounted Russian oil is making up for the significantly lower number of barrels being sold to Europe, dulling the effects of the West's sanctions.

Most of the additional oil has gone to two countries: China and India. China's imports of Russian oil rose 28 percent in May from the previous month, while India has gone from taking in almost no Russian oil to buying more than 760,000 barrels a day.

The oil is being sold at a steep discount because of the risks associated with sanctions imposed to punish Russia for its invasion of Ukraine. Still, soaring energy prices have led to an uptick in oil revenue for Russia, which took in $1.7 billion more last month than it did in April.

Details: The ruble cemented its unlikely status as the world's best-performing currency, rising to new multiyear highs this week on earnings from oil and gas exports.

More news from the war in Ukraine:

The Ukrainian government made an urgent plea for the hundreds of thousands of people living in Russian-occupied southern Ukraine to evacuate in advance of a Ukrainian counteroffensive.
The U.S. attorney general, Merrick Garland, made a surprise trip to Ukraine to announce the appointment of a prosecutor to lead American efforts in tracking Russian war criminals.
American officials say the arrival of new weapons systems will help Ukraine hang on to its territory.
Bridges are critical in the battle for the Donbas region. Shelling has mostly destroyed them, but that didn't stop one woman from walking across a bridge to buy some basics.
The Nobel Peace Prize put up for auction by a Russian journalist to help Ukrainian refugees sold for $103.5 million to an anonymous buyer.

China's expanding surveillance capabilities

Phone-tracking devices are now everywhere in China — as are more than half of the world's nearly one billion surveillance cameras, analysts estimate. The police there are creating some of the largest DNA databases in the world. And the authorities are building upon facial recognition technology to collect voice prints from the general public.

Times reporters spent over a year analyzing more than a hundred thousand government bidding documents, revealing that China's ambition to collect a staggering amount of personal data from everyday citizens is more expansive than previously known.

The analysis found that the police chose locations to maximize the data their facial recognition cameras could collect, such as places where people eat, shop and travel. In one bidding document from Fujian Province, the police estimated that there were 2.5 billion facial images stored at any given time.

The authorities are using phone trackers to link people's digital lives to their physical movements. In one case, documents revealed that the police bought phone trackers with the hope of detecting a Uyghur-to-Chinese dictionary app, which would identify phones likely belonging to members of the oppressed Uyghur ethnic minority.

For more: Here are the four biggest takeaways from the Times investigation.

A crowded showroom in Dongguan, China, in 2018 with a model of a residential compound.Reuters

China's property market cools

A property debt crisis and a sluggish economy in China have touched off a plunge in new home sales and depressed real estate prices for the first time in years — jeopardizing an important investment for millions of Chinese families.

The situation grew worse when a new variant of the coronavirus triggered widespread lockdowns and brought the economy to a standstill. Prices have dropped across the country, but demand has not returned, a frightening sign for an economy that had come to depend on housing for job growth and business spending.

But so far, China's efforts to revive the housing market with lower mortgage rates, easier credit, subsidies and relaxed regulations have not worked. In April and May, new home prices fell in more than half of China's 70 biggest cities for the first time since 2016, and sales of such properties tumbled nearly 60 percent.

Macro: Since the country started to roll out reforms in 1988 for commercial housing, property has become a pillar of an ascendant economy. By some estimates, it accounts for about 30 percent of China's gross domestic product.

Micro: For young people who want to marry, owning a home is considered a must before starting a family. Instead of investing in stocks and bonds, Chinese households allocate most of their savings to real estate — at more than twice the rate of Americans.

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THE LATEST NEWS

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Nuri, South Korea's first domestically produced space rocket, lifting off from a launchpad at the Naro Space Center in Goheung, South Korea, on Tuesday.Korea Pool/Yonhap, via Associated Press

South Korea sent a small satellite into orbit using its first homemade rocket, bringing the country closer to its dream of becoming a player in the space industry.
A new Chinese study about the relatively low risks of the Omicron variant for severe illness has reignited discussion about the country's "zero Covid" policy.
Jumbo Floating Restaurant, a mainstay of Hong Kong for decades, capsized and sank in the South China Sea.
The high-profile trial of a man charged with sexually assaulting a government employee inside Australia's Parliament House has been delayed after a judge ruled that a journalist's public comments could prejudice jurors.
An explosive report from BuzzFeed raised more questions about whether TikTok exposes the personal information of Americans to Beijing, and put President Biden's China policy under a new spotlight.

World News

Britain's largest railway strike in three decades has thrown travel plans for tens of millions of people into disarray.
Jihadist rebels killed 132 civilians in the West African nation of Mali over the weekend, the government said.
After more than a decade of chaos and war, fed-up Libyans are clamoring for peace: "We want to taste life, not death."
Colombia's new president, Gustavo Petro, will now have to prove that he can carry out the major reforms he promised.

A Morning Read

African wild dogs, among the most endangered mammals on earth, walking on a trail in Zambia.Zambian Carnivore Programme

Over nine months, three African wild dogs traveled some 1,300 miles, more than twice the previous record for the species, according to scientists. The sisters braved lions, crocodiles, poachers and raging rivers on their journey to find a new home.

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ARTS AND IDEAS

You're still on mute

It's been almost 28 months since offices shut down at the beginning of the pandemic. More than enough time to buy a ring light, hang some art on the walls and figure out the mute button. But as Emma Goldberg, a Times business reporter found, many people have still not adapted.

Plenty of people have kept working from home with a certain level of flippancy, as though any day might herald a sweeping return back to cubicles and commutes.

At the end of 2021, three million professional roles in the U.S. went permanently remote. Many other workers have been in limbo, going back to the office either part time or waiting for a return-to-office plan that won't be postponed. The confusion and ambivalence people feel can make it hard to invest in making a remote work setup feel permanent.

Last week Sujay Jaswa, a former Dropbox executive, did a video shoot with the camera aimed toward the ceiling. "His business philosophy does not include pulling off a decent zoom," Room Rater, a Twitter account that scores video call backgrounds, wrote.