• 2 days Iraq Begins To Rebuild Largest Refinery
  • 2 days Canadian Producers Struggle To Find Transport Oil Cargo
  • 2 days Venezuela’s PDVSA Makes $539M Interest Payments On Bonds
  • 2 days China's CNPC Considers Taking Over South Pars Gas Field
  • 2 days BP To Invest $200 Million In Solar
  • 2 days Tesla Opens New Showroom In NYC
  • 3 days Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 3 days Venezuela Sells Oil Refinery Stake To Cuba
  • 3 days Tesla Is “Headed For A Brick Wall”
  • 3 days Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 3 days IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 3 days Goldman Bullish On Oil Markets
  • 3 days OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 3 days Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 3 days Syria Aims To Begin Offshore Gas Exploration In 2019
  • 4 days Australian Watchdog Blocks BP Fuel Station Acquisition
  • 4 days Colombia Boosts Oil & Gas Investment
  • 4 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 4 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 4 days Aramco On The Hunt For IPO Global Coordinators
  • 4 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 4 days India Feels the Pinch As Oil Prices Rise
  • 5 days Aramco Announces $40 Billion Investment Program
  • 5 days Top Insurer Axa To Exit Oil Sands
  • 5 days API Reports Huge Crude Draw
  • 5 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 5 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 5 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 5 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 6 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 6 days Exxon To Start Reporting On Climate Change Effect
  • 6 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 6 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 6 days Forties Pipeline Could Remain Shuttered For Weeks
  • 6 days Desjardins Ends Energy Loan Moratorium
  • 6 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 6 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 7 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 9 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 9 days Mexico Blames Brazil For Failing Auction

Breaking News:

Iraq Begins To Rebuild Largest Refinery

Alt Text

Don’t Count On A Utah Shale Boom

President Trump has announced a…

Alt Text

The 'Mega' Oil Field That Will Never Boom

The Chinese Junggar basin in…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

China Set To Become More Dependent On Oil Imports

China

The pace of China’s oil imports growth is one of the most closely watched indicators in the industry—a gauge of the country’s huge appetite for oil and the impact it has on global oil trade and prices.

China is importing increasing volumes of oil not only because of demand growth, but also because its domestic oil production is declining as large ageing fields mature and as companies cut production from higher-cost fields amid the lower-for-longer oil prices. Thus, Chinese dependence on crude oil imports is continuously rising and is set to further grow in the foreseeable future.

Last year, China met 64.4 percent of its crude oil demand with imports, due to high production costs at home and favorable international prices resulting from the global glut. This was a 3.8-percent increase compared to 2015, and the level of dependency was set to increase further this year.

According to an overview by the U.S. Department of Commerce from July this year, China’s oil import reliance exceeded 65.6 percent in 2016 and is forecast to rise to 80 percent by 2030. By 2020, Chinese consumption of crude oil is expected at 12 million bpd. At the same time, PetroChina, Sinopec, and CNOOC have reduced production from their higher-cost fields in China because they have been unable to compete at oil prices below $50 a barrel. Consequently, domestic oil production fell by 6.9 percent to 3.98 million bpd in 2016, the lower oil prices prompting China to fill its strategic petroleum reserve by importing more, and cheaper, foreign crude oil. 

Related: The Geopolitical Video Game 

This year, Chinese oil production has further dropped by 4.1 percent between January and October, Michael Lelyveld writes in an analysis in Radio Free Asia. In October alone, China’s crude oil production fell to below 3.8 million bpd.

At the same time, imports are rising and will continue to rise. This year, Chinese oil import reliance is expected to hit 69 percent. According to the International Energy Agency’s (IEA) World Energy Outlook 2017, China’s oil import dependence will rise to 80 percent by 2040, Lelyveld writes.

China is ramping up oil and gas exploration efforts and plans to develop unconventional resources in a bid to ease its reliance on oil and gas imports, the official Xinhua news agency reported on Saturday, quoting a research center at the Ministry of Land and Resources.

By 2035, China will “likely to keep the dependence rates on oil, gas imports within 70 percent and 50 percent, respectively,” according to the research center.

“The notion that they might somehow suddenly increase domestic oil production seems extremely implausible,” Mikkal Herberg, energy security research director at Seattle-based National Bureau of Asian Research, told Radio Free Asia.  

“Even if they can keep it flat, they’re still headed toward 80-percent import dependence,” Herberg noted.

That’s also roughly the estimate in the BP Energy Outlook 2017, according to which China’s oil import dependence will rise to 79 percent in 2035 from 61 percent in 2015. In fossil fuels production, a 146-percent surge in gas production and 1-percent coal production growth are expected to more than offset a 13-percent decline in oil production through 2035. Related: OPEC’s Latest Agreement May Not Stabilize Oil Prices

In the World Energy Outlook 2017, the IEA estimated that Chinese net imports of oil will reach 13 million bpd in 2040.

“But stringent fuel-efficiency measures for cars and trucks, and a shift which sees one-in-four cars being electric by 2040, means that China is no longer the main driving force behind global oil use – demand growth is larger in India post-2025,” the IEA said.

“China’s choices will play a huge role in determining global trends, and could spark a faster clean energy transition,” the Paris-based agency said, noting that “When China changes, everything changes.”

In Chinese domestic oil production and its import dependence, the trend is that production is on the decline and oil import reliance in on the rise.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Josh Gregner on December 06 2017 said:
    One things puzzles me:

    “But stringent fuel-efficiency measures for cars and trucks, and a shift which sees one-in-four cars being electric by 2040, means that China is no longer the main driving force behind global oil use – demand growth is larger in India post-2025,” the IEA said.

    Is 25% of the vehicles being EVs by 2040 not a bit conservative? China will require new cars being sold as of 2019 to be 10% EVs. It is 12% the year after. And I really don't see them slow down for the years to come.

    By 2040 all vehicles sold today will be out of service. And we know the base-case already exceeds 12% EVs by 2020. So there is no way this will only be 25% by 2040.

    On India driving oil demand: if by 2030 sale of all ICE cars is forbidding in India (current policy trend in India) - how is India going to drive oil demand in 2040 - a full 10 years after that?!?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News