As China’s oil demand continues to exceed production, oil imports have increased significantly over the past decade, reaching record highs in 2013. According to the U.S. Energy Information Administration (EIA) estimates, the country constituted nearly a third of global oil demand growth in 2013.
China consumed an estimated 10.7 million bbl/d of oil in 2013, up 3,80,000 bbl/d, or almost 4 per cent, from 2012. In 2009, China became the second-largest net oil importer in the world behind the US, and average net total oil imports reached 6.2 million bbl/d in 2013. Notably, for the fourth quarter of 2013, China actually became the largest global net importer of oil.
EIA projects that China is likely to surpass the US in net oil imports on an annual basis in 2014. The country’s oil demand growth hinges on several factors such as domestic economic growth and trade, power generation, transportation sector shifts and refining capabilities. The consumption is expected to rise through 2014 at a moderate pace to reach approximately 11.1 million bbl/d and its net oil imports is likely to touch 6.6 million bbl/d compared to 5.5 million bbl/d for the US, as per EIA estimates.
Scenario Sees Diversified Oil Sources
Substantial oil demand growth and geopolitical uncertainties have increased pressure on China to import higher volumes of oil from various sources. To ensure adequate oil supply, the country has diversified its sources of crude oil imports in recent years. It imported 5.4 million bbl/d of crude oil on an average in 2012, rising 7 per cent from 5.1 million bbl/d in 2011, according to China’s customs data and FACTS Global Energy (FGE).
Crude imports now outweigh domestic supply and they made up over half of total oil consumption in 2013. EIA expects China to import over 66 per cent of its total oil requirements by 2020 and 72 per cent by 2040 as demand is expected to grow faster than domestic crude supply.
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