US status as net exporter of oil reminds China of energy disadvantage

Illustration: Luo Xuan/GT

While China‘s imports of crude oil continue to set new records, the US has made a major shift, becoming a net exporter of crude and petroleum products for a full month for the first time in 70 years. The comparison highlights the urgency for China to accelerate adjustment to its energy strategy.

Data from the Energy Information Administration showed that the US exported 89,000 barrels per day (bpd) more than it imported in September, a key milestone in its pursuit for energy independence. In June this year, the US had briefly overtaken Saudi Arabia to become the world‘s largest oil exporter, according to the International Energy Agency.

The change of its status from the world‘s major oil importer to a net oil exporter has earned America more flexibility in energy policy, which makes an important foundation for US strategic adjustment facing Russia, the Middle East, and other major oil producers.

While China is unlikely to achieve the same sort of energy independence as the US did, the American experience should still serve as a reminder in terms of energy security for China.

Despite the existence of shale oil and other renewable energy resources, crude oil remains an important strategic resource. Increasing dependence on foreign oil supplies will continue to affect China‘s policy-making flexibility and feasibility. Moreover, the high level of dependence on oil imports has exposed China to some risks, as any factor affecting the global oil market may have impact on China.

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For instance, the drone attack in Saudi Arabia in September, which removed 5.7 million bpd from the country‘s oil production capacity, caused direct economic losses for China. Considering China‘s large-scale import volume, any minor rise in crude oil prices could lead to tens of billions of yuan of additional costs for the country. 

American sanctions on Iran have also put China in a very difficult position.

In this sense, China must speed up the adjustment of its energy strategy. The first step is to promote the use of renewable energy, which is the most important part and requires continuous government support. The second is to diversify import sources to ensure energy security. 

While strengthening cooperation with major oil- and gas-producing countries like Russia, China should also expand oil exploration and development around the world. The third is to save energy, which has long been stressed by the central government for China‘s sustainable development.

The author is a reporter with the Global Times. bizopinion.cn
Newspaper headline: US status as net oil exporter reminds China of energy disadvantage


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