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China soon to surpass US as world's biggest oil importer

0 Comments| August 12, 2013

WASHINGTON, Aug. 12 (UPI) -- China is on course to surpass the United States as the world's largest importer of oil, data from the U.S. Energy Information Administration show.

"The imminent emergence of China as the world's largest net oil importer has been driven by steady growth in Chinese demand, increased oil production in the United States and a flat level of demand for oil in the U.S. market," the Energy Department's statistical forecasting arm said in a forecast released Friday.

EIA says China's net oil imports will exceed those of the United States by October on a monthly basis and by 2014 on an annual basis.

Net oil imports include crude oil, lease condensates, natural gas liquids, biofuels and other liquids as well as gains from refinery processing.

While the United States' total annual oil production is expected to rise by 28 percent between 2011 and 2014 to nearly 13 million barrels a day, EIA says China's production will increase at a slower rate -- by 6 percent over the same period -- and is likely to be just a third of U.S. production in 2014.

EIA attributes the U.S. growth in production primarily to shale and other unconventional oils, such as those being extracted in California’s San Joaquin Basin, where Calgary-based Zodiac Exploration (V.ZEX, Stock Forum) has been testing deep horizontal wells, as well as Gulf of Mexico deep water drilling.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, reacting to the EIA report, told China's Global Times it was "only a matter of time" for China to surpass the United States in net oil imports.
"The most important thing is to find solutions because as the largest oil importer China will be very vulnerable to oil price changes," he said.

While the United States has played an important role in stabilizing global oil prices and in maintaining security in major oil-producing countries, it will have less motivation to do so as it relies less on imported oil, the Times reports experts say.
Lin notes China is not yet capable of playing such a major role as the United States has had, and that to guarantee energy security, it must focus on saving energy and diversifying oil sources.

"Looking beyond 2014, higher U.S. oil production and stagnant or declining U.S. oil consumption, coupled with China's projected strong oil demand growth and slow oil production growth, suggest that once China replaces the United States as the world's largest net oil importer, the gap between net oil imports in China and the United States will grow," the EIA report states.

-UPI, with file by Chris Parry

Tags: OIL & GAS E&P

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