• 1 day Shell Oil Trading Head Steps Down After 29 Years
  • 2 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 2 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 2 days Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 2 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 3 days Rosneft Announces Completion Of World’s Longest Well
  • 3 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 3 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 4 days Russian Hackers Target British Energy Industry
  • 4 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 5 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 5 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 6 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 8 days The Oil Rig Drilling 10 Miles Under The Sea
  • 9 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

China’s Mysterious Arctic Silk Road

As China pushes through its…

Alt Text

Russia Unfazed By U.S. Oil Sanctions

Western sanctions on Russia’s energy…

Alt Text

Fuel Crisis Hits Kazakhstan Hard

Amid an ongoing fuel crisis,…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

China Outmaneuvers U.S. in Energy Game

China Outmaneuvers U.S. in Energy Game

The International Energy Agency said last week the United States is set to pass Russia as the largest oil producer outside of OPEC. New drilling technology for shale deposits in the United States have led to exponential gains in oil production. For OPEC, crude oil supplies are at their lowest levels in years, fed largely by ongoing struggles in Libya. That shift means the global energy center is migrating away from the Middle East and North Africa. It's China, however, that's making its presence known on the international stage despite the ongoing sea change in production trends.

The Energy Information Administration, the U.S. Energy Department's statistical arm, said in a market report last week it expected U.S. oil production next year will average 8.5 million barrels per day. Most of the gains are expected to come from the Permian basin in western Texas and the Williston basin spread out over the Great Plains states. Oil services company Baker Hughes Inc. said the activity in the Williston and Permian basins was on the rise when compared to the second quarter of 2013.

Related article: The Real Reason Behind China’s Military Expansion

OPEC in its monthly market report said Russia oil production averaged 10.5 million barrels per day, up slightly from the previous report. That's a record high for Russia, though the International Energy Agency said it’s the United States that's "in the driver's seat of growth." The Paris-based IEA said the United States is on pace to become the largest producer outside of OPEC by the middle of next year. OPEC, meanwhile, saw its supplies drop below 30 million bpd because of production problems in Libya and Iraq.

On the consumption side, however, the EIA said it expects China to be among the largest in the world. EIA estimates Chinese liquid fuels consumption will increase by 430,000 bpd next year, fed by its expanding economy. In its report, OPEC said China should get most of its oil from Saudi Arabia, Angola Russia, Iraq and Iran respectively. U.S. legislation enacted in the wake of the 1973 oil embargo restricts its export capacity. The EIA said China is the largest net oil importer in the world, passing the United States in September. It expects that trend to continue through 2014.

Related article: US Shale Dealt a Blow as Oil Majors Struggle to Turn a Profit

China is already the world's leader when it comes to purchases of coal, copper and iron ore. OPEC said oil imports from August to September declined by 21 percent but increased for the year by 15 percent. The Chinese economy should grow by 7.7 percent next year, compared with a global expectation of 3.5 percent for 2014.  With its own oil production short of annual demand, China is expected to look to take over oil and natural gas companies overseas. In February, state-owned China National Offshore Oil Corp. spent $15.1 billion to acquire Canadian oil and gas company Nexen. CNOOC may have a tough time getting oil overseas from Alberta oil plays but it may have help from a Canadian government eager to diversify an export market that relies almost exclusively on the United States. Canadian Natural Resources Minister Joe Oliver visits China this week to let investors know his country is open for business. While the United States is taking the lead in energy production, its oil is isolated from most of the international market. With dynamics in the energy market shifting, China has the capital to take control.

By. Daniel J. Graeber of Oilprice.com




Back to homepage


Leave a comment
  • Synapsid on October 14 2013 said:
    The IEA announcement refers to US production of "more than 10 million barrels a day for the last two quarters". The US has not been producing anywhere near that volume of oil for the last two quarters; the figure is for oil plus natural gas expressed as barrels of oil equivalent.

    China is not only buying into production companies and purchasing actual sources of oil--it is engaged in several joint ventures with oil producers (Saudi Arabia, Nigeria and others) to build refineries. No one builds a refinery without securing long-term supply of crude, and the crude for those refineries is removed from the global market leaving less for refineries in other countries (such as the US) to buy.

Leave a comment




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