FX.co ★ China shifts to net oil export

The People’s Republic of China has been holding the leading positions in terms of energy consumption. Indeed, with a large number of factories and other facilities which consume huge volumes of energy, China is considered to be one of the biggest world’s manufacturers. The government has long been trying to improve the situation, and the measures launched were fruitful. The strategy of enhancing its own fuel capacity was successful. China actively invests, directly or via private companies, into development and exploration projects both in China and abroad. The businessmen who buy shares in gas and oil companies are well supported by the local authorities. Such a policy has already proved to be effective as China finally became a net exporter of refined oil products, including petrol and diesel. The official data shows that in March the exports of oil products hit 650 thousand barrels a day, up 3.4% from a year ago, while imports totalled 560 thousand barrels a day, plummeting record 25%. “We believe the trend towards China exporting more and importing less refined products will intensify over the course of 2014 and 2015, driven by a large expansion of domestic refining capacity, including 800,000 b/d this year,” said Citi analyst Ivan Szpakowski. China has already demonstrated similar dynamics before, but that was an exception rather than the rule. However, the current trend is believed to be long-lived.