(EnergyAsia, August 23 2017, Wednesday) — On the back of a 13.8% surge in the first half of 2017, China’s crude oil import is on course to reach another record-high level this year.
Citing official Customs data, investment firm Jefferies Hong Kong and UK’s Gibson Shipbrokers estimates China imported around 8.55 million b/d in the first six months of 2017 compared with 7.51 million b/d over the same period last year. The surge will consolidate China’s position as the world’s largest crude oil importer in a single year, having snatched the title from the United States in 2016.
According to the US Energy Information Administration (EIA), the US imported 7.36 million b/d last year. With its domestic production expected to rise 5.2% to 9.33 million b/d in 2017, US demand for foreign oil will continue to decline. The EIA expects US crude imports to fall 6.1% to 6.88 million b/d in 2017, and by a further 8.1% to 6.32 million b/d next year.
Gibson said it expects China’s demand for imported oil to continue to grow as the country develops its refining industry and builds strategic petroleum reserves to meet its rising energy demand.
“A large percentage of overall crude import growth can potentially be attributed to strategic petroleum reserves (SPR) build,” said Gibson. Citing the International Energy Agency, the company said it expects China to continue to build its SPR “for years to come”, with 2020 as a tentative completion date, and as much as 182 million barrels of storage space waiting to be commissioned.
China’s urgency to build up its SPR is largely driven by two major concerns. The country’s domestic crude production has been in gradual decline while most of its suppliers in the Middle East, Asia, Africa and Russia are faced with political and military threats that could lead to abrupt oil export cut-offs.
Citing Reuters data, Gibson said China’s domestic production fell by 5.1%to average 3.89 million b/d in the first half of 2017.