China is breaking records for crude oil imports and isn’t likely to stop soon as new refineries ramp up and hopes grow that the easing of trade tensions with the US will bolster the economy.
Even as economic expansion has slowed, the pace of growth still requires ever more oil. China imported an unprecedented 11.18 million barrels a day in November, which surpassed the US high-water mark of 10.77 million set in June 2005. China’s purchases will probably continue to rise into next year as new refineries in Zhejiang and Zhanjiang increase runs, and as a widely anticipated tax rebate boosts domestic production of marine fuel.
The strength of US oil imports in the mid-2000s created a political crisis. President George W Bush famously said “America is addicted to oil,” and passed measures to curb demand, such as requiring corn ethanol be mixed into gasoline. Ultimately, it was the shale boom, spurred by high oil prices, low interest rates and technological innovation, that began to displace foreign barrels. Although the US is still the world’s second-biggest importer of crude, in September it became a net exporter for the first time in 70 years when oil products like gasoline, diesel and propane are included.
Import dependency weighs similarly on China’s leaders, who have leaned on state-owned energy giants such as PetroChina Co to boost domestic oil and gas output. The government is also one of the world’s biggest supporters of renewable energy, electric vehicles and high-speed rail, all of which should help depress oil demand in the long run.