Global Liquid Fuel Consumption Increases, China Becomes the Largest Importer

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Global Liquid Fuels Consumption Increases, China Becomes the Largest Importer

According to the Energy Information Administration (EIA) of the U.S., global consumption will grow by 1.0 million bbl/d in 2013 and by another 1.2 million bbl/d in 2014. The organization reveals that China, the Middle East, Central & South America, and other countries outside of the Organization for Economic Cooperation and Development (OECD) will be the major consumers.

Interestingly enough the EIA says that OECD liquid fuels consumption will decline by 0.2 million bbl/d in 2013 and 0.1 million bbl/d in 2014; according to the organization this will be happening due to lower consumption in Europe and Japan.

China Liquid Fuel Import Increases to The Record Level

This is an achievement which China would not have wanted as it increases its energy insecurity and CAD. Whereas China has become the biggest oil importer, the U.S. may beat Russia as the leading energy supplier in the coming years.

According to a U.S. government data released this week, China passed the United States in September as the world’s biggest net oil importer which has to do a lot with its faster economic growth and strong auto sales.

China is the leading contributor to projected global consumption growth which according to estimates consumes nearly 420,000 bbl/d in 2013 and expected to consume more than 430,000 bbl/d in 2014.

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Earlier the country was able to meet its oil needs from domestic sources e.g. the vast Daqing field in the northeast. However, it all changed after 1990s when the economic boom outstripped its production capacity and now it relies heavily on imports.

Over Dependency on Oil Import May be a Trouble for China

EIA says that Chinese oil consumption outstripped production by 6.3 million barrels per day which is quite problematic as it indicates the country had to import that much to fill the gap. In its latest report, the organization says that China’s steady growth in oil demand has led it to become the world’s largest net oil importer, exceeding the United States in September 2013.

The organization says that the trend will continue through 2014 and may impose a major challenge for the communist government in the country. Troubles in Middle-East and any disruption may add to the problem as oil prices may increase to a great extent. China may use its global influence to keep the Middle East peaceful and the oil supply smooth to keep oil prices lower.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com