• 4 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 7 minutes Countries with the most oil and where they're selling it
  • 10 minutes Stack gas analyzers
  • 13 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 2 hours US Military Spends at least $81 Billion Protecting OPEC Persian Gulf Oil Shipping Lanes (16% DoD Budget)
  • 7 hours Climate Change Protests
  • 7 hours Oil at $40
  • 10 hours U.S. Refiners Planning Major Plant Overhauls In Second Quarter
  • 7 hours "Undeniable" Shale Slowdown?
  • 9 hours China To Promote Using Wind Energy To Power Heating
  • 51 mins Gas Flaring
  • 5 hours How many drilling sites are left in the Permian?
  • 22 hours Mueller Report Brings Into Focus Trump's Attempts to Interfere in the Special Counsel Investigation
  • 3 hours Japan’s Deflation Mindset Could Be Contagious
  • 7 hours Negative Gas Prices in the Permian
  • 18 hours Ecoside
  • 1 day Trudeau Faces a New Foe as Conservatives Retake Power in Alberta
Alt Text

U.S. Greenlights Two Major LNG Export Projects

The U.S. Federal Energy Regulatory…

Alt Text

Prepare For An Oil Price Spike

LNG, Storage, Commodities, Silver, Demand,…

Rakesh Upadhyay

Rakesh Upadhyay

Rakesh Upadhyay is a writer for US-based Divergente LLC consulting firm.

More Info

Trending Discussions

Is China Deliberately Trying To De-Rail The Russia/Saudi Oil Deal?

China, the world’s largest oil consumer, has been increasing oil imports and feasting on the low crude oil prices. Could Russia and Saudi Arabia’s plan to stabilize crude oil prices cut into China’s oil hoarding plans?

Chinese oil imports have increased to 32.85 million tons in August, the second highest figure after the record 33.19 million tons import figures of December 2015. It’s a 7 percent increase over the same period last year, and a 6 percent increase over July. Currently, the Asian giant imports 66 percent of its crude oil requirements.

“Chinese oil majors are no longer under orders to increase domestic production, as they were doing so at a loss,” said Adam Ritchie, executive general manager for supply at Caltex Australia Ltd. “China’s change to let economics decide between imports and domestic production is a big change,” reports Bloomberg.

Russia and Saudi Arabia, the two largest suppliers, have been battling it out to increase their market share in China. While Russia has increased its market share in China from 12.6 percent last year to 13.6 percent this year, Saudi’s have seen their share dip from 15.1 percent to 14 percent during the same period.

“There’s a market-share battle going on mainly among the Middle East producers and Russia,” Olivier Jakob, managing director of Petromatrix, said by phone from Zug, Switzerland. “Rivals are making a big push into China,” reports Bloomberg.

An agreement between both the competing producer nations reduces the bargaining power of the Chinese refiners, who had started to choose the spot sales offered by Russia against the long-term contracts policy of Saudi Arabia.

Nevertheless, the Chinese can breathe easy, because like many other experts globally, even the Chinese analysts are not confident that the deal between Saudi Arabia and Russia will result in any substantive action.

"It will be very difficult to implement this agreement, as the volume for each exporter country is different. Many countries - producers of oil and gas rely on exports, so they are unlikely to agree to the terms of the agreement," a senior consultant for Sinopec Yang Qixi said. Related: What’s Behind The Epic Draw In U.S. Crude Stocks?

However, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al-Falih is optimistic that other large oil producers will join forces with Russia and Saudi Arabia to take appropriate steps to stabilize the markets.

"We are optimistic that Algiers meeting will provide a forum, and pre-Algiers that consultations which will take place bilaterally and in groups will bring us to Algiers with some sort of coordinated decisions. But the two countries agree that even if there is no consensus, we will be willing to take joint action when necessary," said Al-Falih.

Along with this, China and the U.S. announced their formal joining of the Paris agreement. China has to wean the economy away from the use of fossil fuels if it expects to achieve its target of carbon emissions by 2030. In order to realize this shift, China will have to make an initial investment of $5.2 trillion in lean energy technologies, which will lead to $8.3 trillion in savings by 2050, according to a study Reinventing fire: China.

Hence, as a major importer of oil, China will want the recently announced cooperation between Saudi Arabia and Russia to fail so prices will remain low. If that happens, China can postpone investments into fossil fuels and divert that money towards clean technology, which will help it to reduce its carbon footprint.

By Rakesh Upadhyay for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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