Washington Times on August 12, 2013, reported that China will become the world’s largest importer of crude oil in October, surpassing the U.S. for the first time as the Asian giant’s rising consumer class of drivers grows increasingly thirsty for fuel, the U.S. Energy Information Administration is projecting. Excerpts below:
China already is the largest importer of oil from the troubled Middle East, taking away a distinction that plagued the U.S. since the 1970s. Its ascendance as the world’s largest importer — even as U.S. dependence on Middle Eastern oil declines to negligible levels — could transform regional and world politics as the focus of global defense efforts for decades has been keeping open the vital oil shipping lanes leading from the Persian Gulf.
Juan Zarate, an analyst with the Center for Strategic and International Studies, said the U.S. should use the occasion of China’s growing dependence on Middle Eastern oil and reduced U.S. dependence to rethink its longtime policy of bearing the lion’s share of defense costs in the Middle East and act more in its economic self-interest.
China has promoted its economic interests aggressively for years by openly courting oil exporters shunned by the U.S. and its allies, such as Iran, Sudan and Venezuela, to secure supplies, even if the effect is to support dangerous or renegade regimes.
“They are playing a new geoeconomic game, where economic power is leveraged aggressively for national advantage,” he said, while the U.S. seems “unprepared to play this game” or respond in kind.
…China’s consumption of oil to surging by 13 percent to 11 million barrels a day between 2011 and 2014, the energy agency said. China’s manufacturing industries also are heavy users of oil. With China’s domestic oil production at about 3 million barrels a day and growing slowly, that means it has had to escalate oil imports to satisfy demand.
China’s growing oil needs are affecting the U.S. and its consumers because it now has a major and growing influence on the price of oil and other critical commodities that are set in global markets, said Carlos Pascual special energy envoy at the State Department.
While China’s dependence on foreign oil is growing rapidly, U.S. dependence has been dwindling rapidly. Imports started shrinking dramatically in the U.S. last year as production of oil from shale deposits in North Dakota and Texas kicked into high gear.
U.S. oil production surged at the same time as more fuel-efficient cars mandated by the government and a trend among Americans to drive less caused a drop in U.S. oil consumption to 18.7 million barrels a day recently from a peak of 20.8 million in 2005, the agency said.
The sharp turnaround in oil imports and consumption helped cause a drop in the monthly trade deficit in June to the lowest level since 2009. Behind the change was a drop in net oil imports to the lowest in 15 years.
The plentiful and relatively cheap U.S. supplies of oil and natural gas pouring out of Midwestern shale deposits also has given a competitive edge to the U.S. in such energy-intensive industries as chemicals and aluminium. Many U.S. and foreign firms are building plants near prolific shale formations to take advantage of the gushers of cheap oil and gas.
While China has vast shale deposits, too, and is eager to tap those to satisfy some of its growing demand for oil and gas, analysts say, the Asian nation is years away from being able to exploit such unconventional oil sources as it lags the U.S. in technical expertise.
Gary Thayer, an analyst with Wells Fargo & Co., said the drop in oil imports and increased competitiveness of U.S. industry bode well for the U.S. economy.