New Zealand and Philippines defence pact to counter China's influence in South China Sea
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New Zealand and the Philippines signed a Status of Visiting Forces Agreement (SOVFA) on April 30 amid rising regional tensions with China. The pact will reinforce a growing network of security partnerships in the Indo-Pacific and allow troops from each nation to train and operate on the other's territory.New Zealand Defence Minister Judith Collins and Philippine Defence Secretary Gilberto Teodoro Jr. formalised the deal at Manila's Malacañang Palace, with President Ferdinand Marcos Jr. in attendance.Collins said the agreement reflects a shared concern over 'the risks to the international rules-based order.' She added, 'As our prime minister has said, New Zealand looks to protect and advance our interests in the Indo-Pacific, and we can only do so alongside partners'.In his briefing, Teodoro mentioned the need to uphold international law in the South China Sea, where Beijing's 'Nine-Dash Line' claim overlaps with Philippine maritime zones. He hit out at China, saying, 'There are those who follow international law, and there are those who want to redefine it.'The new agreement adds up to Manila's existing pacts with the United States, Australia, and Japan and precedes a similar deal with Canada expected 'very soon,' Teodoro added. Together, these accords enable joint exercises, training exchanges, and mutual logistics support to enhance deterrence against any 'unwanted behaviour' at sea.For New Zealand, the SOVFA marks a step forward in Prime Minister Christopher Luxon's broader plan to 'pull their weight' in regional security. Luxon in early April 2025 announced NZ$9 billion in defence upgrades over four years, to lift military spending to 2 per cent of GDP within eight years. Analysts say the pact will help diversify Wellington's alliances beyond its traditional trade ties with China.As maritime drills continue in the South China Sea—including recent exercises with the US, Japan, and Australia—the Philippines and New Zealand will begin 'military-to-military training' under the SOVFA's framework. Both governments view these agreements as essential for regional stability and freedom of navigation against growing Chinese power projection.
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First Post
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After Moscow's invasion in 2022, European and other Western markets drastically cut their purchases, forcing Russia to reroute crude toward Asia at discounted rates. STORY CONTINUES BELOW THIS AD This paved the way for India and China to become the two largest buyers of Russian supplies. How China has ordered more Russian oil As India has scaled back, China's refiners have stepped in to buy additional Russian supplies. By mid-August, state-owned oil companies and major private refiners had secured at least 15 cargoes of Russian crude for October and November delivery. Each shipment ranged between 700,000 and 1 million barrels, representing a substantial addition to China's intake. Most of these cargoes will originate from Russia's Arctic and Black Sea ports, routes that normally supply India rather than China because of logistical proximity. Muyu Xu, senior crude oil analyst at Kpler, explained that the decision reflected an opportunity created by lower prices. Russian grades were trading at least $3 per barrel below comparable West Asian supplies. 'As for whether China will continue buying, I personally believe that right now is still a very good opportunity, because over in India, Trump is still pressing hard on them,' she said. Xu added that if Chinese refiners moved quickly, they could lock in further shipments before the US considered retaliatory action. 'Taking advantage of this opportunity while prices are low, I think more refineries will probably consider buying more, within a week or two,' she noted. Richard Jones, a Singapore-based analyst at Energy Aspects, said that while China was unlikely to replace all of India's lost demand, the additional purchases would nonetheless make a difference in the short term. STORY CONTINUES BELOW THIS AD 'We do not expect China to absorb all of the additional Russian volumes, as Urals is not a baseload grade for Chinese majors,' he told Reuters, referring to the type of Russian crude involved. How Trump targeted India over Russian oil By 2023, Russian crude accounted for more than one-third of India's oil imports, representing 36 per cent of the total market. United Nations trade data shows that in 2024, India imported $53 billion worth of petroleum and crude oils from Russia. In volume terms, this amounted to roughly 88 million tonnes during that year. However, in July, Trump announced that countries continuing to buy Russian crude would face the risk of secondary tariffs. According to the White House, the move was designed to increase economic pressure on Moscow and reduce its capacity to finance the war in Ukraine. This month the US imposed a further 25 per cent tariff on Indian goods shipped to the United States, on top of an existing 25 per cent levy, raising the total to 50 per cent. The Trump administration explicitly connected this penalty to India's imports of Russian oil and gas. STORY CONTINUES BELOW THIS AD As a result, Indian refiners have begun scaling back their purchases. Reuters citing analysts reported that New Delhi has reduced its Russian crude imports by between 600,000 and 700,000 barrels per day, a significant contraction. State-owned refineries in particular paused new orders as discounts narrowed, while private refiners also cut back amid fears of US reprisals. Senior figures in the Trump administration have been forthright about their position. US Treasury Secretary Scott Bessent told CNBC that India had moved from negligible levels of Russian oil imports before the war — less than 1 per cent of its supply — to sourcing around 42 percent from Russia. 'This is what I would call the Indian arbitrage – buying cheap Russian oil, reselling it as product,' he said, adding that Indian refiners had generated '$16 billion in excess profits – some of the richest families in India.' White House trade adviser Peter Navarro also argued that New Delhi's purchases were indirectly financing Russia's war effort. STORY CONTINUES BELOW THIS AD His colleague, deputy chief of staff Stephen Miller, echoed the sentiment earlier in the month, insisting that India's continued reliance on Russian crude was 'not acceptable.' How the scale of China's oil imports has increased China has long been the world's largest oil importer, and Russian crude plays a growing role in its supply mix. In 2024, Chinese customs data showed that the country imported 109 million tonnes of Russian crude, representing close to 20 per cent of its total energy intake. United Nations statistics indicate that Russia's shipments to China amounted to $62.6 billion in value that year. Much of Beijing's Russian crude intake traditionally comes in the form of ESPO shipments from the Far East port of Kozmino, which offers a relatively short shipping route. Urals and Varandey grades, by contrast, usually head to India. A container ship sails along Nakhodka Bay near the oil terminal in the port city of Nakhodka, Russia, August 12, 2022. File Image/Reuters By August, Kpler data showed that China's year-to-date Urals imports averaged only about 50,000 barrels per day. The sudden booking of 15 cargoes for October and November therefore marks a sharp increase from previous patterns. Overall, China currently takes in around 1.2 million barrels per day of Russian seaborne crude. India, by comparison, had been purchasing about 1.7 million barrels per day until the recent cutbacks. Analysts agree that China cannot entirely make up for India's reduction, leaving Russia facing the risk of a significant drop in revenues if Indian demand does not recover. 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Bessent told CNBC that China had imported around 13 percent of its crude from Russia before the war, a figure that has since risen to 16 percent. 'So China has a diversified input of their oil,' he said. He argued that Beijing had not engaged in the same form of arbitrage that India had undertaken. How Russia is dependent on Asian markets Moscow has become heavily reliant on Asian customers in the wake of Western restrictions. Since 1979, when the US first imposed sanctions on Iran after the Tehran hostage crisis, oil markets have frequently been shaped by geopolitical disputes. For Russia, the fallout from the Ukraine conflict has forced a near-total reorientation of exports. European embargoes and G7 price caps have shut Russia out of its most lucrative markets. In their place, India and China have provided vital outlets. STORY CONTINUES BELOW THIS AD Together, the two countries absorbed the bulk of Moscow's seaborne exports in 2023 and 2024, helping stabilise its revenues even at discounted prices. China has made clear that it does not recognise US restrictions on global energy trade. Responding to questions by the Financial Times about its imports of sanctioned oil, the Ministry of Foreign Affairs in Beijing said the country has 'consistently opposed illegal unilateral sanctions' that lack approval from the United Nations Security Council. For the immediate future, China's refiners are taking advantage of discounted Russian barrels that India has relinquished. With inputs from agencies
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