A prominent oil analyst has claimed that China’s dramatic reduction in crude oil imports since the US/Israel war of choice on Iran helped prevent a full-blown global energy shock.
Real demand for oil plateauing in China
In an interview with German DW, oil analyst Rory Johnston said:
Chinese crude oil imports fell by roughly 40- 45%, roughly 5 million barrels a day from pre-war levels to the levels we saw average through June. That is gargantuan. That is a larger shift than the entirety of the world’s SPR (Strategic Petroleum Reserves) releases combined.
According to Reuters, since the unprovoked war on Iran began at the end of February, overall U.S. inventories, including commercial and SPR stocks, have fallen by 120.71 million barrels to 734 million barrels as of June 26, the lowest since 1984.
Bloomberg quoted Vortexa’s figures, estimating that Chinese seaborne oil imports plunged last month to a decade low of 5.9 million barrels a day, down about 50% from prewar levels.
Vox explained:
To put it simply, there are millions of more barrels per day for other countries to import than anyone thought was possible.
According to Citi analyst Francesco Martoccia, they have been constantly arguing that real demand for oil in China is plateauing.
He told CNBC recently that last year, for instance, 900,000 barrels a day of oil demand was for Chinese strategic reserves, and that they were not sure whether this demand would return.
Eroding Western fossil advantage
Johnston pointed out to DW that Beijing’s concerted policy effort to dominate renewable energy technologies, from photovoltaics to lithium-ion batteries, has made China “ambidextrous” across the entire energy space.
He argued that while the West has long prided itself on fossil fuel dominance, China has been quietly building an equally formidable position on the demand side, saying:
China, the world’s largest crude oil importer, has clearly demonstrated that it can cut back imports by nearly half and have very little effect immediately on its economy. That’s a kind of superpower in the global oil and global energy market.
Trump has frequently tried to play both rising and falling oil prices- benefiting the USA.
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump said in March.
After signing the MoU in June – which he violated of his own accord this week, as he restarted bombing Iran – he said–
THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!)
Basically, Trump can boast all he wants about being the largest producer of oil – China is actually setting the terms.
Featured image via the Canary
By Nandita Lal
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