Russia just one-upped the Saudis in China

Moscow just one-upped the Saudis in China: Russia is officially Beijing's number one crude supplier.

"China imported a record 3.92 million metric tons from its northern neighbor in May, according to data emailed by the Beijing-based General Administration of Customs on Tuesday," according to Bloomberg.

"That's equivalent to 927,000 barrels a day, a 20% increase from the previous month. Saudi sales slumped 42% from April to 3.05 million tons."

And what's more: The Kingdom actually fell to third place behind Angola, who sold 3.26 million tons to China, up 14% from April.

"Following Russia's recent acceptance of the renminbi as payments for oil, we expect more record high oil imports ahead to China," Gordon Kwan, the Hong Kong-based head of regional oil and gas research at Nomura Holdings Inc., told Bloomberg.

"If Saudi Arabia wants to recapture its number one ranking, it needs to accept the renminbi for oil payments instead of just the dollar."

This is the first time that Russia is China's top crude supplier since October 2005. After disagreements with the west over the Ukraine conflict, Moscow turned its gaze (and commodities) eastward as it looked for new markets.

Back in 2013, Russian state oil company Rosneft agreed to supply 365 million tons over 25 years to China National Petroleum Corp. under a $270 billion deal. Furthermore, Rosneft agreed on a $85 billion, 10-year deal with China Petrochemical Corp, according to Bloomberg.

However, it's important to note that despite all the Sino-Russo fanfare, energy-starved Beijing is ultimately after the best deals. It is not buying from Russia simply for some ideological reason.

"Russia is using its good relationship with China to increase supplies and has now taken the top spot," Gao Jian, an analyst at SCI International, a Shandong-based energy consultant, told Bloomberg.

"Saudi Arabia is losing its crown as its selling prices in Asia haven't been attractive enough."

In the background of all of this, Russia has been reluctant to play Saudi Arabia's oil game.

This past spring, Saudi "officials have repeatedly stated that the entire cartel and non-OPEC players like Russia would need to join and bear the burden of a cut as in 1986 and 1998," RBC Capital Markets' Helima Croft wrote in a note to clients earlier.

However, Russia wasn't showing any signs of jumping on the coordinated production cut.