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Russian President Vladimir Putin did not exaggerate when he announced on June 20 that China and Russia were close to an unprecedented contract involving millions of tons of oil and worth over $60 billion.

China National Petroleum Corp (CNPC), the country's largest oil producer, revealed more detailed figures of its deal with Russian counterpart Rosneft four days later; the Russian side would supply China with 40 million tons of oil a year for the next 25 years. The annual total would equal 10 percent of China's oil consumption in 2012.

This unprecedented contract will lock up the world's most important oil producer and oil consumer for the long term. It helps China secure a reliable long-term oil supply and take a step toward its target of diversifying its energy supply sources. Indeed, domestic news reports have focused on these benefits. But that is only the perspective of China.

There are benefits for Russia. First, the deal furthers its strategy of expanding eastward. The second benefit is that Rosneft will receive sufficient cash flow to repay debts from previous acquisitions and launch new projects.