• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 1 min Wonders of Shale- Gas,bringing investments and jobs to the US
  • 6 hours Rural and Conservative: Polish Towns Go 'LGBT free' Ahead Of Bitter European Election Campaign
  • 15 mins Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? To get Jared (Frisch School 2.8 GPA) a Mideast win with peace deal ? China greatest threat next 50 years.
  • 4 hours IMO2020 To scrub or not to scrub
  • 5 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 10 hours Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 1 hour Why is Strait of Hormuz the World's Most Important Oil Artery
  • 2 hours California's Oil Industry Collapses Despite Shale Boom
  • 6 hours Greenpeace Blocks BP HQ
  • 4 hours Crude oil?
  • 20 mins Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 2 hours Global Warming Making The Rich Richer
  • 4 hours Shale to be profitable in 2019!!!

China's Oil Import Dependency Deepens

Oil storage

China satisfied 64.4 percent of its crude oil demand with imports last year because of high production costs at home and favorable international prices resulting from the global glut. This was a 3.8-percent increase on 2015, Chinese media reported, adding that this level of dependency will increase further this year.

Last year, China produced crude oil at an average cost of US$45-50 a barrel, while international prices were lower than that for much of the year, allowing the second-largest consumer of the fuel in the world to satisfy its domestic demand with higher imports.

In fact, China turned into a sort of battleground for the biggest exporters, including Russia and Saudi Arabia, as they fought for market share, challenged by the re-entry of Iran on international oil markets.

According to analyst Li Li from the Independent Chemical Information Service, by 2020, China’s reliance on imported oil could climb to 70 percent of demand on the back of local energy companies cutting production and spending because of the 2014 oil price crash. What’s more, some of China’s largest fields are mature, which means production costs are more likely to rise than fall.

Already output at the two largest ones, Daqing and Shengli has been substantially curbed, and there are no new discoveries made in the last few years to replace them. However, now that oil prices have recovered somewhat, production at home might inch up this year, Li said.

A projection of China’s crude oil demand for this year was actually one of the two drivers behind the latest jump in oil prices, which saw Brent crude pass the US$55-a-barrel mark to reach US$56.05 in European trading earlier today.

The projection came from CNPC, who said that 2017 will see Chinese oil demand hit a record 12 million barrels daily. This, the state-owned energy giant said, would mean that net imports would rise by 5.3 percent to 396 million tons in 2017.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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