China is on track to become the world’s largest importer of oil, likely drawing most of its supplies from Middle East producers, according to research from consulting firm Wood Mackenzie.
China’s oil imports will rise from a rate of 2.5 million barrels per day in 2005 to 9.2 million barrels per day in 2020, Wood Mackenzie said. At the same time, U.S. imports will fall from 10.1 million barrels per day in 2005 to 6.8 million barrels per day by 2020, according to the analysis.
The shift would mean a 360 percent jump in Chinese oil imports while U.S. imports would drop 32 percent, Wood Mackenzie said.
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China would therefore be spending about $500 million on oil imports annually by 2020, the company said.
“China and the U.S. are heading in opposite directions for crude oil import trends,” said Ann-Louise Hittle, head of macro oils research for Wood Mackenzie, in a statement. “Although the U.S. was the largest import market before, China will surpass U.S. demand for oil imports and peak spend. Notably also is a change in traditional suppliers — China will look towards (Organization of Petroleum Exporting Countries) supply more as U.S. relies on it less. These are trends that suppliers should look out for but equally, a trend China must consider in evaluating its cost structure.”
The shift is largely a result of increased U.S. production of oil at the same time as new federal vehicle efficiency standards have slashed domestic demand for fossil fuels.
With demand for oil falling in the United States and domestic production rising, less oil is needed from other countries.
This will leave other international oil producers, like those in the Middle East, increasingly marketing their products to China, where the number of vehicles is growing from 20 million in 2005 to 160 million by 2020, said Harold York, principal oil markets analyst for Wood Mackenzie, in a statement.
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