China Builds Strategic Petroleum Reserves Amid Oil Price Plunge, but Still Lags Western Nations
March 11, 2015
Breaking Energy
The crude oil price plunge of more than 50% since last June has proved a mixed blessing for global economies. It has cut deep into the coffers of oil producing nations while providing much needed relief for oil and natural gas import dependent countries.
China, the world’s second largest oil importer, is also taking advantage of the oil price plunge. Pragmatic energy planners in Beijing have set in motion a record breaking oil buying spree in efforts to fill the country’s Strategic Petroleum Reserves (SPR). In December, China’s crude oil imports rose above 7 million barrels per day for the first time. China’s oil imports for both January and February were slightly lower, but still increased over the same time last year.
Li Li, research and strategy director at Guangzhou-based energy consultancy ICIS China, told Breaking Energy that despite increased crude oil purchases China still needs to increase it oil reserves. “In 2014, China imported 300 million metric tons of crude oil, one fourth of that would equal 90 days of use. After five years crude import will increase to 400 million metric tons,” she said. She added that it’s still not enough to meet reserve standards.
China currently holds 22.7 days of oil reserves, including 9 days in phase one of its SPR and 13 days from commercial stocks. Global standards, however, are much higher. Most International Energy Agency members, for example, hold at least 90 days of oil storage reserves.
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