The world's largest importer of crude this year is estimated to fall on China. Despite the slow economy in China, the country will sure be replacing the U.S. who imported the biggest crude previously.
Referring to a Bloomberg survey of company officials, China is anticipated to keep increasing its crude import, which almost a fifth of the total is from privately owned refineries. This is good news for the world's producers, who are struggling with the oversupply and the lowest price for more than 11 years.
In 2015, import licenses began to be granted to those private refineries from the China's government. This is claimed to improve the energy industry by enhancing more investments. Before, the ones who were allowed to do crude import are only large-scale state-owned companies, including China Petroleum & Chemical Corp. and PetroChina Co.
According to ICIS China, an industry researcher, China is forecast to purchase 7.4 million barrels a day of crude in total in 2016, or a minimum of 1.1 million barrels a day. This is beyond the import by the U.S. which is estimated to touch 7.26 million barrels a day this year.
These are some of the detail purchases; Shandong Dongming Petrochemical Group 150,000 barrels a day, an asphalt producer Panjin North Asphalt Co. 170,700 barrels a day, Baota Petrochemical Group 150,600 barrels a day, Sinochem Hongrun Petrochemical Corp. 115,000 barrels a day, Shandong Kengli Petrochemical Group 60,200 barrels a day, and Shandong Huifeng Petrochemical Corp. 116,500 barrels a day.
As mentioned in Reuters, the Ministry of China did state last year that China would support more refineries to receive crude import licenses. Therefore, they will no longer follow the old policy, in which they had to sell the crude oil they import to the state-owned oil larger companies.
With the recent regulation from the National Development and Reform Commission last year, more small-scale refineries can directly use the imported crude for their own production, under certain circumstances. For example, they have to fulfill some conditions related to the environmental issues, including closing the old refineries that are causing pollutions.
an Analyst for Drillinginfo who has 20 years practicing law with a focus on public policy and energy security, Tom Morgan, said in his article in Forbes, "Unlike Saudi Arabia (which is ironically a net importer of refined product despite producing 10 million barrels of oil per day), China currently is a net exporter of petrochemicals."
In fact, China is now is the "fastest growing petrochemical industry worldwide". China's push to close obsolete teapot refineries in favor of modernized, complex refineries that add more value per barrel of refined oil points to a long-term need for increased feedstock imports."
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