According to data released by the General Administration of Customs on May 9, China, the world's largest crude oil buyer, imported 6.6% more crude oil in April than the same period last year, importing 43.03 million tons, equivalent to 10.5 million barrels per day (1 ton is about 7.3 barrels of crude oil), the first increase in three months, compared with 9.82 million barrels per day in April 2021 and 10.06 million barrels per day in March this year.
The data also shows that China imported a total of 170.89 million tons of crude oil in the first four months of this year, about 10.4 million barrels per day, down 4.8% from the same period last year, while the throughput of China's refineries was also estimated to have fallen by about 6% in April, and refined oil exports were 3.82 million tons in April, down 44% from the same period last year, compared with 4.07 million tons in March.
According to a report released by the China Petroleum and Chemical Industry Federation in February, China's crude oil dependence has dropped to 72%, and it is the first decline in 20 years, which is confirmed by the 4.8% decline in crude oil imports in the first four months of this year, achieving a reduction in foreign dependence on crude oil imports, while China has also restored the storage of strategic crude oil reserves since the first quarter of this year.
Crude oil storage tanks in Shanghai Ocean Hill Port
In fact, crude oil, which has been described as "black gold", represents no commodity comparable to the global economic field, but we have been working hard to obtain this crown jewel - the international crude oil pricing power, and the strategic petroleum reserve is an indispensable economic blood, which is of great significance to ensure the energy supply of all sectors of the economy and stabilize oil prices.
So, how many days can China's strategic petroleum reserves last? According to the estimated statistics of the International Petroleum Organization cited by Reuters, the United States can support about 140 days, Germany is 100 days, and Japan is enough to support 144 days, but because China's strategic oil reserves have been rarely announced, this naturally has caused speculation from international oil companies including the United States and Japan and foreign media.
U.S. crude oil in the U.S. Strategic Petroleum Reserve (SPR) (left), U.S. SPR Seasonal Inventories (right)
According to an internationally recognized practice, oil storage is safe until it reaches 90 days, according to CLSA analysts, China's current reserves are about 70 days, China is the world's second largest crude oil consumer and largest crude oil importer, accounting for 44% of the growth in world oil demand.
Shipping activity suggests that some of China's refineries have been buying oil from the international market at lower discount prices in recent times, and that purchases have been on the rise since April and showing an upward trend, with data showing that in May, Chinese energy buyers bought crude oil and petroleum products from some countries by about 86,000 barrels higher than the average for the same period in 2021.
In this regard, Reuters speculated that China is still on the way to increase its reserves to the equivalent of 90-day imports, according to the foreign media analysis, China's monthly strategic oil reserves can be counted by adding the total amount of crude oil produced domestically by adding the total amount of crude oil produced domestically and subtracting the amount of crude oil processed by China's refineries.
According to data released by the National Bureau of Statistics on April 18, China produced 51.19 million tons of crude oil in the first quarter, an increase of 4.4% year-on-year, and in the first quarter, processed 171.44 million tons of crude oil. Imports of crude oil in the first quarter were 128 million tons, so based on the above method calculations, China may add about 610,000 barrels of crude oil reserves per day to its commercial or strategic inventories in the first quarter of this year, and with the increase in crude oil imports in April, China is expected to store more crude oil into the strategic petroleum reserve since April.
According to the comprehensive statistics released by the National Bureau of Statistics and customs, according to the statistics provided by Reuters, the BWC Chinese network financial research team shows that in 2021, China's storage capacity in its crude oil reserves will increase by about 170,000 barrels per day, and 1.26 million barrels / day in 2020, which means that China will begin to resume increasing oil reserves since 2022.
In response, according to satellite data released by energy analysis company OilX on May 3, Chinese energy buyers seem to have stored a large number of strategic oil reserves, and in the current sensitive environment of the global oil market, Chinese oil companies will have the ability to ensure the supply of refined oil products. According to the National Petroleum Reserve Medium and Long-term Plan, China will form a reserve equivalent to 100 days of net oil imports.
For example, according to Reuters on May 3 citing shipping industry experts Vortexa Analytics and Standard & Poor's global data, in the past few weeks alone, Chinese buyers have stored at least 4 million barrels of Iranian crude oil in Zhanjiang's national reserve tanks, and according to the comprehensive data monitored by the foreign media, in the past 24 months, Iranian oil companies have sold more than 22 million tons of oil to Chinese buyers. Tens of millions of barrels of crude oil have been stored in bonded warehouses in China, and analysis shows that most of them are traded in renminbi and euros.
In terms of oil and currency trading, according to the latest data provided to BWC Chinese network reporters a week ago, as of April 30, the cumulative trading volume of Shanghai crude oil futures increased by 2.97% year-on-year to 57 million lots, at present, 68 international brokerage companies have launched RMB crude oil trading services, 75 overseas intermediaries have been recorded, and it has attracted participants from 25 countries and regions, including the United Kingdom, Switzerland, and the United Arab Emirates. In terms of the global crude oil trading time zone, Shanghai has formed a 24-hour continuous trading range with New York and London, which reflects the increasing influence of the renminbi on the international crude oil market.
BWC Chinese Finance team in the week of May 6 again through the online and telephone survey of more than a dozen U.S. crude oil futures market traders results show that they said that since the fourth anniversary of the listing of RMB crude oil, especially after the Asian market pricing power function began to appear, the global crude oil futures market price volatility and trading volume has been driven, and the most direct performance is that they also began to frequently focus on the night market of RMB crude oil futures.
This most vivid footnote means that the monetary pricing power of crude oil in the Asian and European markets is being expanded, you know, before the Shanghai crude oil futures contract was not listed, the international trading volume in the previous Asian session was very light, and the price fluctuations were extremely small, at the same time, China is also steadily promoting exchange rate reform and a wider range of financial market opening, which means that there will be more international investment pouring into China's real economy.
According to the Chinese Academy of Social Sciences and other institutions jointly released the World Energy Blue Book pointed out that the RMB crude oil futures are more expected to become the Asian crude oil pricing benchmark, the current radiation of the Asia-Pacific region of the RMB crude oil pricing market function has emerged, you know, a new oil currency system whether there is the active participation of foreign investors, it reflects the pricing ability, and more and more international participants to continue to trade is also a link between China's crude oil futures and the international spot market, but also a specific embodiment of the RMB pricing function. This will mean that more international institutional investors will enter the Shanghai crude oil futures market in the future to support China's real economy.
Therefore, according to Reuters' analysis, next, after the Iranian authorities replace the original foreign exchange position of the US dollar with the renminbi, some international energy participants, including Iran, Indonesia, Angola, etc., are expected to use the renminbi and Chinese energy traders more for settlement. According to the Nikkei Asian Review, asian markets are best settled and traded in renminbi and japanese yen, and this new change facilitates more oil trading and reserves.
Some market participants estimate that if more international crude oil market participants join in, they could increase the volume of oil yuan trading worth about $600 billion to $1 trillion per month, and the number and scope of international payments using the renminbi may increase as more countries diversify their risks. In particular, the time is ripe for the adoption of digital currencies in China's crude oil commodity retail and futures markets, and it is clear that China's version of digital currencies will enhance the breadth and depth of serving the global economy and can play an alternative role in the transformation of the international settlement system.
In this regard, Reuters is more blunt, saying that before, whether it is Russia, Japan, India or the United Arab Emirates launched crude oil futures products, the challenge to the petrodollar has failed, but the Chinese version of crude oil futures has successfully done what others have tried in vain and have not done so far.
More importantly, however, the large-scale purchase and settlement of imported oil by Chinese energy buyers in renminbi will also help accelerate the construction of the strategic petroleum reserve, and at the same time, it will also directly help hedge against the risk of energy imports and oil price premiums brought about by large fluctuations in the US dollar exchange rate. However, now, there are also voices that believe that in the context of China's new energy technology substitution and oil and gas resource exploitation technology improvement, and the continuous discovery of new oil and gas resources, there is still a need to establish a strategic petroleum reserve scale of more than 90 days. (End)