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Analyst, Energy
15th October 2013
Introduction
China and US are two largest oil consumers, two largest oil importers China will overtake the US as the largest net oil importer US: growing oil output and stagnating oil demand China: rapidly growing oil demand and incremental oil supply growth Impacts on both energy markets, and on the oil market globally Impacts involve economic, environmental and geopolitical factors
In 1993 China became a net oil importer In 2003 China became the second largest oil market In 2009 China became the second largest net oil importer China to become the largest net oil importer Higher oil demand: economic growth, urbanisation, living standards In 2010 China became the largest market for new car sales
Bilateral oil for loan deals and stock building for a strategic reserve
Curbing demand growth (fuel efficiency and non-oil transport options)
To date Chinas role in the Middle East has been mainly commercial
US-China tensions have arisen out of Chinas bilateral relations (Iran)
Conclusion
China will displace the US as the largest oil-importing economy The Middle East will remain important to China as a source of supply China aims to diversify sources and reduce demand growth US to maintain role in the Middle East despite less reliance on region Trends have implications for US-China relationship in Mideast and Asia Chinas oil deficit is growing, for US deficit is lower but prices are high Areas of potential tension, but also for co-operation as well