Every year, state-owned giant China National Oil Corp. publishes an estimate of when the country’s oil demand might peak. Over the last few years, the date hasn’t changed much — give or take, around 2030 — but the apex just keeps moving higher.
In 2018, CNPC said Chinese consumption would climax at about 690 million metric tons. In 2019, it revised its forecast to 705 million tons; in 2020, to 740 million; and in 2021 to 780 million. Translated into barrels a day using a typical conversion factor, the 2018-to-2021 increase equates to 1.8 million more barrels a day, or nearly as much as the current daily oil consumption of Germany.
For all the jibber-jabber about slowing Chinese demand — whether due to climate change policies or restrained economic growth — the Middle Kingdom is gulping more and more crude. And the trend is set to continue, at least for a few more years, thanks to new deals with Saudi Arabia.
The Saudis have attempted to crack open China’s oil-refining industry for decades, trying to buy stakes as a beachhead to supply more oil into the People’s Republic. It’s a well-worn strategy: The Saudis did the same in other big petroleum markets, investing in refiners from Japan to the US to South Korea. In exchange for their equity, the Saudis locked in sales of their oil. It’s a money-for-crude investment that guarantees the Saudis steady demand for their oil.
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