The current situation with oil prices has become a big problem for the majority of members of the oil market. The decline in prices jeopardized even shale projects in the United States. Venezuelan officials said that the nation's economy was in danger, the Russian economy suffers from low oil prices as well. Yet, one player on the market is most likely happy.
Many believe that prices have fallen due to the actions of Saudi Arabia. The countries that produce fuel face certain problems. However, China took advantage of the situation. The number of supertankers bound for Chinese ports has grown to a record-high level in nine months. The number of largest crude-transporting vessels in the industry reached 80. On average, each of these tankers carries two million barrels, which means that in the near future, China will receive 160 million barrels. Most likely, the process will continue.
Obviously, China is trying to fill all of its storage facilities to the maximum, while the price is low. Eighty supertankers at the same time - this is the highest figure since January 3 of this year.
On October 22, the cost of Brent oil fell to a four-year low amid rumors that Saudi Arabia, Kuwait and other OPEC members will not cut production.
It may seem at first sight that 80 tankers is not that much. Over the past two years, the average number of vessels traveling to China at the same time was 63. It just so happens that China's policy on the oil market is similar to its policy on the market of gold. In a nutshell, China buys as much as it can, as long as prices are low.
Average daily consumption in China has grown to 10.3 million barrels. IEA predicts the growth of 2.3% in 2014 and 3.2% - in 2015. At the same time, in September, China increased oil imports by 13.1% vs. August - to 6.7 million barrels a day. Over the first nine months of 2014, imports rose by 8.3% to 6.11 million barrels a day.
China is totally dependent on oil imports. This peculiarity makes the country vulnerable, should economic problems start. The demand on "black gold" in China has been growing steadily. The Celestial Empire will be spending $500 billion a year on oil imports by 2020, Wood Mackenzie reports. This is partly due to a sharp increase in the number of cars in the country.
China satisfies its hunger for oil mainly through imports of oil from Angola and Venezuela. Russia's share in oil imports has been growing too. At the same time, it appears that Saudi Arabia is not China's priority at all. Currently, Saudi Arabia accounts only for 19% of China's oil imports, and this level remains unchanged for two years.
In the near future, China could become an important factor for oil prices to stabilize. If the number of supertankers traveling to China will not reduce in a short term perspective, the situation on the global market will change for the better.
US President Joe Biden and Iraqi Prime Minister Mustafa Al Qadimi signed an agreement on July 26 to formally end the USA's military presence in the country by the end of the year