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Japan has surpassed China as the largest US creditor and become a global oil hegemony. Has it become a danger signal?

bwchinesewx @ 2019/12/17

China's crude oil imports reached a record 11 million 130 thousand barrels / day in November, and imports increased by 10.5% in the first 11 months of 2019, according to Reuters's analysis of the data released by China's customs on December 9th. The increase in 1-9 months was 9.7%, which not only showed strong growth in crude oil imports, but also increased slightly in the past three months.

In this regard, Reuters speculated that it is widely known that China is still on the way to increase its reserves to the equivalent of 90 days of imports. According to the blue book forecast of China's oil and gas industry development and analysis, it is predicted that by 2020, China will have a reserve scale equivalent to 100 days of net oil imports.

Because for an economy, strategic crude oil reserves are indispensable economic blood, which is of great significance for ensuring energy supply and stabilizing oil prices in various sectors of the economy. So, how many days will China's strategic oil reserves last if there is an emergency of oil supply disruption? Because China's oil reserves have been rarely published, this naturally caused speculation by international oil companies and foreign media.

Reuters quotes the international petroleum organization's estimate statistics, the United States can support about 149 days, Germany for 100 days, while Japan is enough to support to 150 days, but as the United States on the Middle East and other overseas oil dependence, the United States' strategic oil reserves naturally decline, the United States strategic crude oil reserve system was established in the 70s of last century, since the Middle East oil producers implemented the crude oil embargo, the United States began to establish a long-term reserve mechanism, storing oil in 60 strict Rock Salt Caves.

According to the US Energy Information Administration (EIA) in December 13th, in September, the United States exported more than 89 thousand barrels of oil per day than imports. We note that this is the first time that the United States has been a net exporter of oil since its monthly record in 1973. According to the law passed by the United States Congress, by the beginning of 2028, the size of the strategic oil reserve in the United States will drop to 410 million barrels, a decrease of 43.57% from the end of 2009. In December 13th,

But Japan's increase in oil reserves has been increasing. Behind this, on the one hand, there is almost no oil resources in Japan. Therefore, Japan's energy companies attach particular importance to strategic crude oil reserves. According to Japan's oil and natural gas and metal mineral resources agency, Japan's stone oil reserves are divided into two major channels, namely, state reserves and private reserves, plus Japan is the world's major oil and gold controlling country, which makes Japan's oil reserves more and more.

According to the latest news, according to the 11 daily report of Oilprice website in December, in the Middle East oil producing countries' tight supply chain, natural resources poor Japan is seeking to strengthen its oil reserve strategy. It is reported that an energy group of Japan's industrial province suggests strengthening the oil reserve plan. Most of Japan's crude oil imports rely on the Middle East. The Japanese Ministry of industry is expected to formulate a new strategy in 2020 to strengthen the safety of oil reserves.

An official said that the implementation time of the new strategy has not yet been determined, but will replace the foreign exchange reserve plan, and Japan is about to launch a new crude oil reserve plan, which has become a dangerous signal behind the world's largest oil bullion, especially in the context of tight global oil production and Japan's three consecutive month surpassing China as the largest U.S. debt reserve country.

The analysis shows that Chinese buyers may also import more crude oil in the coming months, especially when China's oil giants decide to accelerate the replenishment of strategic crude oil reserves. According to the latest data from the customs and National Bureau of statistics, the crude oil processing volume in China increased by 5.9% to 4.39 million tons in the first 10 months, and the crude oil imports amounted to 3.69 billion tons, up 9.7% from 9 million 950 thousand, or 10.5% over the same period last year, but even so, China still seems to continue to hoard oil reserves at an alarming rate.

In this regard, Reuters speculated that it is widely known that China is still in the process of raising its reserves to the equivalent of 90 days of imports. China does not provide detailed data on the flow of crude oil to strategic reserves and commercial inventories, but it can be observed by observing the total amount of crude oil from imports and domestic oilfields and reducing the actual refinery processing.

Data show that the domestic crude oil output in October is equivalent to 3 million 790 thousand barrels per day, plus imported crude oil, a total of 14 million 510 thousand barrels per day, deducting the processing capacity of 13 million 620 thousand barrels per day, which means that about 890 thousand barrels / day of crude oil is likely to flow into commercial and strategic reserves. In the second quarter, about 1 million 300 thousand barrels per day were put into commercial reserves.

Coincidentally, the national energy board also said in September that China's commercial and strategic crude oil inventories were about 80 days net imports. According to Reuters projections, the first quarter of 2020 could reach a target of 90 days net imports. However, China did not specify what level to begin to stop increasing reserves, but according to China's oil and gas industry development analysis and Outlook report, the blue book predicts that by 2020, China will form a reserve scale equivalent to 100 days of net oil imports. At the same time, China has built 9 national oil reserve bases, which can reserve about 33 million 250 thousand tons of crude oil.

At the same time, in recent years, China's oil companies have begun to purchase and invest a lot of oil and gas fields in the world. It is generally believed that most of the crude oil is actually entering the strategic petroleum reserve. In addition, Iran national gas company has been storing large quantities of crude oil in bonded warehouses in the Asian market for months to prevent the loss of foreign customers due to us dollar restrictions, including Iran national gas company's about 20000000 barrels of crude oil stored in the bonded warehouses in Dalian last November to decide whether to sell to Chinese customers or other foreign customers, which provides an option for Iran to continue exporting oil.

Not only that, according to a recent announcement by PetroChina Xinjiang Oil Field Co, with the help of the new generation of super heavy oil development technology, the heavy oil output in this oilfield has broken through 100 million tons and has built the largest production base of high quality naphthenic base heavy oil, and the high quality naphthenic base heavy oil is known as the scarce oil in the oil field, and is the strategic raw material for the national economic and major engineering construction.

At the same time, when China intends to purchase large quantities of imported oil in Renminbi, it will also help speed up the construction of strategic oil reserve. However, more importantly, it will directly help to hedge the risk of energy import and oil cost premium caused by the fluctuation of the US dollar. However, there is still some controversy. There is an analysis of whether there is a need to establish a strategic oil storage scale for more than 90 days under the upgrading of petroleum technology, the discovery of new oil and gas resources and the replacement of new energy. (end)