From searching the globe in search of oil deals with intense geopolitical ramifications like Sudan, Niger, Iraq and Venezuela, to cutting a controversial multi-billion dollar oil deal in Canada’s oil sands play, China has become all things to all people in the global oil industry in an effort to satisfy its massive and growing oil thirst.
China’s largest African suppliers of oil are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and Libya.
China has also recently cut major energy deals with Russia, as Moscow and Beijing unfreeze decades of mutual suspicion and mistrust in a growing geopolitical alliance also aimed at reducing U.S. regional and global hegemony. Russia recently replaced Saudi Arabia as China’s largest oil importer. However, Middle Eastern oil still represents over 50% of China’s oil needs.
In efforts to offset China’s growing foreign oil dependence quandary, Beijing has fervently tried to maximize its domestic oil reserves. However, in dismal news for energy planners in Beijing, China’s domestic oil production is now declining , with possible global repercussions.
China’s oil production peaked last year at approximately 4.3 million barrels per day (bpd), according to a Wall Street Journal report on Friday. The report, citing interviews with industry executives, said the development has significant implications globally, including the potential for higher crude prices over time as China steps up imports.
This news comes as China’s oil imports have reached record highs. So far this year, China’s oil imports have increased by 16%, while the country is poised to pass the U.S. as the world’s largest crude oil importer.
The pace of the increase could slow, however, since Beijing has taken advantage of recent low prices to fill its strategic petroleum reserves, which are now reaching full capacity.