Oil companies in China have increased their purchases as global prices continue to drop, with the nation topping oil imports in the world in the month of April as well as June.
Director of Xiamen University’s Chinese Energy Economy Research Center Lin Boqiang believes that China may well become the largest importer of oil in the world this year and retain its leading position over the next coming years as well.
A researcher at the Chinese Academy of Social Sciences Yang Kuang said that the decline in oil prices by more than 60 per cent from June of last year through January this year has given China the best opportunity to set up its strategic reserves of oil.
Experts said that the oil imports of the country will continue to climb. Citing the insufficient strategic reserves of oil and the energy consumption structure of the country, the report said that the oil imports are unlikely to change in the foreseeable future.
In addition to this, oil companies in the country have been increasingly depending on oil imports since domestic fields have been exhausted and exploration of crude has become even more difficult.
As a result, China’s dependence on imported oil has been rising constantly and is most likely to reach 60 per cent this year amounting to a total of 534 million tons. By contract, US’s dependence on imported oil declined to 45 per cent in 2014, from its high level of 68 per cent, given that shale oil now has numerous new domestic resources.
A report by Reuters states that China’s increasing ability to purchase and sell millions of oil barrels on the Asian market in just a matter of minutes has given the country so much power that other traders are more often than not forced to trail behind prices agreed by the largest oil importer in the world.