Beijing Highlights Russian Oil Troubles Just Ahead of Israel-Iran Conflict

Beijing's potential signal is difficult to interpret

On June 11th, the People’s Daily published a downbeat report on Russia’s oil and gas revenues, quoting Moscow’s Ministry of Finance on weakening energy prices and tapping the National Wealth Fund to plug fiscal holes. The article stood out for its pessimistic tone and prominence—especially for a Chinese state organ that rarely highlights Russia’s economic fragility.

At first glance, the piece seemed to signal quiet unease in Beijing over the war in Ukraine. It echoed past hints that China is preparing for a post-Putin Russia, consistent Xi depersonalizing the relationship during his May 2025 visit —part of a broader recalibration since the Prigozhin mutiny.

The analysis could be read as a subtle warning to Moscow—or a signal to Western observers—that Beijing’s patience with the Kremlin’s war is thinning.

But any signal in the article was quickly overshadowed by Israel’s June 13th strikes on Iranian targets. In this new context, Beijing’s motivations are harder to parse. Was Beijing using the article to hint that a Middle East crisis—by spiking oil prices—might inadvertently empower Russia’s war effort? Was it trying to pressure the West to avoid escalation in Iran for fear of indirectly strengthening Putin?

Much hinges on what Beijing knew in advance. It is generally difficult to conceal military preparations of this scale, Israel reportedly sought U.S. approval for its strikes, and U.S. operational security seems incredibly lax. Beijing likely had advance intelligence, to a degree, although it may not have synthesized the information correctly. Authoritarian regimes’ security services tend to have extremely robust collection programs but weak analytical capabilities. In any event, the Iranian force structures were utterly surprised by the strikes, suggesting Beijing did not share intelligence of an imminent attack, or that the Iranian leadership ignored any warnings.

In sum, Chinese intelligence likely picked up indicators of Israeli military preparations, but whether that intelligence shaped the June 11th article—or whether the article was unrelated —is unknowable for now, and perhaps for much longer.

Ultimately, if Beijing is serious about limiting the war in Ukraine, rhetorical signals and muddled messages aren’t enough. The clearest message would be material: cutting dual-use exports and ending its support for Russia’s defense industrial base.

Russian oil and gas article in the People’s Daily

Russia's oil and gas revenues fell 14.4% year-on-year in the first five months – People’s Daily

Xinhua News Agency, Moscow, June 10 (Reporter Liu Kai) The Russian Ministry of Finance said on the 10th that from January to May 2025, the Russian federal fiscal budget revenue of oil and gas was about 4.24 trillion rubles (1 US dollar is about 80 rubles), a decrease of 14.4% compared with the same period last year.

According to the preliminary assessment of budget implementation released on the Russian Ministry of Finance website on the same day, the main reasons for the year-on-year decrease in Russia's oil and gas revenue in the first five months of this year include the decline in oil export prices and the one-time receipt of additional oil extraction tax from enterprises in February last year, resulting in a large base last year.

The Russian Ministry of Finance said that due to weak prices, there is a risk of a decline in oil and gas revenues. According to the latest socio-economic development forecast parameters, it is expected that by the end of 2025, the loss of oil and gas revenues will reach 447 billion rubles.

The Russian Ministry of Finance pointed out that using the Russian National Wealth Fund to make up for the loss of oil and gas revenues and accumulate additional oil and gas revenues during periods of favorable prices can maintain the stability of the budget system when oil and gas revenues fluctuate.

俄罗斯前五个月油气收入同比减少14.4%

新华社莫斯科6月10日电（记者刘恺）俄罗斯财政部10日表示，2025年1月至5月，俄联邦财政预算收入中的石油和天然气收入约为4.24万亿卢布（1美元约合80卢布），与去年同期相比减少14.4%。

　　根据俄财政部网站当天发布的预算执行情况初步评估结果，今年前五个月俄油气收入同比减少的主要原因包括石油出口价格下跌，以及去年2月一次性收到企业补缴的石油开采税导致去年基数较大。

　　俄财政部表示，由于价格疲软，油气收入存在下降风险。根据最新的社会经济发展预测参数，预计到2025年底，油气收入损失将达到4470亿卢布。

　　俄财政部指出，利用俄国家财富基金弥补油气收入损失，并在价格有利时期积累额外油气收入，能够在油气收入波动时维持预算体系稳定。

Until next time,

Joe

Joe Webster is a senior fellow at the Atlantic Council and editor of the China-Russia Report. This article represents his own personal opinion.

The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.