Figures released last week show that China’s crude oil imports in the first half of 2021 declined for the first time in eight years. China has been the world’s largest net importer of crude oil and other liquids in the world since September 2013 and almost on its own created the 2000-2014 commodities ‘supercycle’, characterized by consistently rising price trends for all commodities – including oil – that are used in a booming manufacturing and infrastructure environment. This oil consumption boom from China was a product largely of the 8+ percent average annual GDP growth recorded by the country over that period, with many spikes well above 10 percent. So does this sudden dip in oil imports in the first half of this year – against declining economic growth over the past few years – mean that a major supportive driver of oil prices has gone for good? A noticeable decline in the rate of economic growth in China began in 2012 when it dipped below the key 8 percent figure for the first time since 1990. Since then the true number for China’s GDP growth has been a matter of considerable conjecture as, although the official annual figures have always been above at least 6 percent, traders and analysts are aware that the numbers are subject to extreme political pressures that could not tolerate headline GDP figures of, say, just 3 percent per year, where a number of traders and analysts think it is. Whatever the real figure, the fact remains that up until this latest data release for the first half of this year, China has still accounted for the consumption of 10-14 million barrels per day (bpd) of crude oil since 2012, crossing the 10 million bpd of crude oil imports level in 2019, having overtaken the U.S. as the world’s biggest net importer of crude oil in 2017. Read More.
China’s Changing Policies Could Create A Huge Oil Demand Deficit
Posted by Simon Watkins, Oilprice.com
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