In September 2013 China became the biggest oil importer and was ahead of the US for the first time. This was unexpected, considering a rapid growth of China’s demands, though the US Energy Information Department forecasted that this will happen only in 2014.
As far as local production is concerned, China is behind here. From 2011 to 2014 oil production in the US increased by 31%, while in China it increased by 5%.
As a result of that China is fully dependent on oil import, which will make it vulnerable in case of economic crisis.
Demand in oil in China grows forcing it spending $500 billion a year for import by 2020, according to Wood Mackenzie. This is connected with a rapid growth of cars in the country. But who will be able to satisfy this demand?
During 6 months, 2014 export from Iran to China increased by 48% against 2013 and reached 630,000 barrels a day. This is only 10% of total import of the country, but this sends a clear message to other countries.
Despite the sanctions against Iran, China made it clear that it will count on Iran in the near future.
Right now China has two regions, which can supply the country with required volume of oil, not considering existing partners. Africa has been a reliable source of oil for China for a long time. Meanwhile, China is worried about unstable situation in Lebanon, Sudan and South Sudan.
For this reason the Chinese authorities tried to strengthen relationships with the traditional partners, such as Angola, which is the second biggest source of oil import to China. IraqandVenezuelaalsobenefitedfromChina’sproblems.
Oil production in the US has made the country less dependent on the traditional foreign partners. The world deliveries have changed quickly. At present 40% of oil from Angola is supplied to China, while US receives only 15%. Venezuela does not rule out that in the coming several years deliveries to China will double up to 1 million barrels a day.
Unlike Angola and Venezuela, Saudi Arabia is excluded from China’s plans. At present oil Saudi Arabia exports 19% of oil to China, which remains unchanged for two years. In the future share of Saudi Arabia will keep declining.
Two new oil refineries on the west of China will run on oil delivered from Russia and Central Asia. The traders believe that China does not want to be fully dependent on only one supplier.
One can suppose that China will be short of oil no matter what, because it lacks its own sources of oil.
However, it is unclear what price China is going to pay to achieve this goal.
