One month ago, the People’s Republic of China (PRC) overtook the United States of America as the world’s largest economy. This year, the PRC will also become the world’s largest oil consumer. And now Asia’s powerhouse is on the cusp of becoming a net exporter of refined oil products.
In October 2014, predicated by a slowdown in economic growth, China’s petroleum product imports sank by 22.2 per cent to 16.3 million barrels, while oil product exports rose by 30.3 per cent to 22.4 million barrels. With a net export rate of 6.1 million barrels, October was China’s highest level of net exports on record and the fifth month in a row that the country shipped a surplus of crude products.
As the trend is set to continue until the end of 2014, this will be the first year in modern history that the PRC will figure as amongst the ranks of the oil exporting nations.
While Chinese barrel per day exports barely outstripped those of Gabon – a country 778 times smaller in population terms – the domestic supply glut has both hurt margins in the world’s second largest oil refining nation and stopped oil majors investing in the sector.
The PRCs cut back on oil imports combined with a pan-global oversupply "crisis" has entrained an oil price position that leaves the country in a commodities limbo: neither profiting nor losing from the current situation, but beholden to the whims of a bigger system in which they are entwined, wittingly or not.
And on this, Remembrance Day, how apt....
