China Oil

CHINA OIL

In what could turn out to be a tectonic shift in global energy markets, China has overtaken the United States as the world's largest importer of oil.

According to preliminary data on world petroleum trade in December 2012, China's net oil imports surged to 6.12 million barrels per day (Mbd) while America's net imports declined to 5.98 Mbd, the lowest figure since 1992.

Although these numbers could flip back in favour of the US during the winter months, there is no mistaking the trend line. China is all set to replace the US as the world's largest importer of oil either this year or the next.

As America's domestic oil production grows amidst the shale-gas boom, the US is closer than ever before to reducing its massive dependence on energy imports from the OPEC countries.

The use of new technologies — most notably hydraulic fracturing or fracking, and horizontal drilling — have opened up massive hydrocarbon resources in America.

The US oil production has surged by more than 8,00,000 barrels per day in 2012. It is said to be the biggest annual increase in oil production since the hydrocarbon era began in the US in the late 19th century.

According to the International Energy Agency's latest report, America will overtake Saudi Arabia as the leading oil producer by about 2017 and will become a net oil exporter by 2030.

Energy independence is a popular political goal in the US and the White House recently claimed that America's dependence on foreign oil has gone down every single year since President Obama took office. As part of his strategy to increase safe, responsible oil production in the US, Obama has freed millions of new acres for oil and gas exploration.

TRADING PLACES

As China replaces the US as the largest importer of oil, might Beijing step into American shoes as the principal security guarantor of the oil-rich Persian Gulf?

... contd.

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