China’s crude oil import has steadily increased with the continuous decline of domestic crude oil production and the continuous increase of refining capacity.
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According to the General Administration of Customs, China’s crude oil imports increased by 10.1% to 462 million tons in 2018. Among them, Russian crude oil imports reached 71.49 million tons (or 1.43 million barrels per day), up 19.7% year on year, accounting for about 15.47% of the total domestic crude oil imports.
In December 2018, China imported 1.658 million barrels per day of Russian crude oil, 1.64 million barrels per day of Saudi crude oil, and 540,000 barrels per day of Iranian crude oil, with zero imports of American crude oil.
Russia has been China’s largest supplier of crude oil for three consecutive years. The production of Sino-Russian oil pipeline, shorter transportation distance and flexible transportation mode determine the advantages of Russian crude oil to China, and also lead to the continuous growth of Russian crude oil imports.
China’s largest source of crude oil imports has been Saudi Arabia for more than a decade.
In 2016, with an annual supply of 52.38 million tons, Russia surpassed Saudi Arabia to become China’s largest supplier of crude oil, and maintained steady growth. In 2017, China imported 59.8 million tons of Russian crude oil, an increase of 13.95% over 2016.
In 2011, the Sino-Russian crude oil pipeline with a total length of nearly 1,000 kilometers was put into operation, which opened the history of crude oil pipeline transportation between China and Russia. In January 2018, the second-line project of Sino-Russian crude oil pipeline was put into operation, with a designed capacity of 15 million tons per year. So far, Russia can transport 30 million tons of oil to China through pipeline every year.
The Sino-Russian crude oil pipeline is one of the four major energy strategic channels in China and the largest import channel of onshore crude oil in China. It undertakes the tasks of diversifying China’s oil and gas imports, improving people’s livelihood and ensuring energy security.
According to Harbin Customs data, in 2018, Heilongjiang ports imported 27.252 million tons of crude oil from Russia, an increase of 67.1% over the same period of last year, and the total import value reached 96.04 billion yuan, an increase of 1.2 times over the same period of last year.
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Domestic crude oil production has declined for three consecutive years due to factors such as resource conditions, low international oil prices, poor economic benefits and inadequate upstream investment. Domestic crude oil production was 199 million tons in 2016, 191 million tons in 2017 and 190 million tons in 2018, respectively.
But the domestic crude oil processing volume is steadily increasing. The general export quota of refined oil issued by the Ministry of Commerce also boosts crude oil processing. According to the data of the National Bureau of Statistics, in 2018, the domestic crude oil processing volume exceeded 600 million tons, an increase of 6.8% year on year, and the growth rate was 1.8% faster than the previous year.
In the fourth quarter of 2018, international oil prices fell sharply, China imported and stored oil in large quantities, and China’s refineries also started full capacity production, which promoted the growth of domestic imports of crude oil.
According to the General Administration of Customs, China imported 43.782 million tons of crude oil in December 2018, a new monthly record high of 2.12% year-on-year growth after November. In November, China imported 42.872 million tons of crude oil, an increase of 16% over the same period last year.
In 2018, China’s dependence on foreign oil approached 70%, reaching 69.8%.
China surpassed Japan to become the world’s largest importer of natural gas in 2018, and will continue this trend, according to the “Development Report of Oil and Gas Industry at Home and Abroad 2018″ issued by the Institute of Economic and Technological Research of PetroChina Group.
The report also points out that there is no causal relationship between oil dependence and energy supply security. Oil supply security is also affected by factors such as the stability of import sources, channel security and reserve level. As long as we increase domestic oil and gas exploration and development, ensure the diversification of import sources and channels, improve reserve capacity and guarantee channel safety, high external dependence will not necessarily lead to supply crisis.
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