If currency is an expression of an economy's comprehensive strength and credit, then energy is one of the foundations of a country's economic future, as "black gold" crude oil is the bloodline of the global economy, is the main line of economic civilization development, no commodity can be compared.
Therefore, despite the rapid development of new energy technology, the strategic petroleum reserve is still of great significance to ensure energy supply in various sectors of the economy and stabilize oil prices.
In another development, China appears to have stockpiled a large amount of strategic oil reserves, much more than the outside world knows, according to satellite data released on November 22 by energy analyst firm OilX, the world's second-largest crude oil consumer and largest crude importer, accounting for about 44% of world oil demand growth.
Then, according to data released by Kepler, a global commodity data provider, it is estimated that China's strategic oil reserves are now about 520 million barrels or more, equivalent to 60 days of imports.
According to data released by the General Administration of Customs on November 7, China imported 43.136 million tons of crude oil in October, an increase of 14.13% over the same period last year, which also made China import 413 million tons of crude oil in the first 10 months of this year.
At the same time, the influence of Chinese energy buyers in Middle Eastern producers is growing, and activity data from some shipping agencies indicate that Chinese refineries have been buying oil from the Iranian market at low discounts for nearly two quarters, and that purchases have risen since December, and Iran has been storing crude oil in Asian markets in advance, including Iran's storage of more than 20 million barrels of crude oil in bonded warehouses in Dalian, which provides Iran with options for continuing to export oil.
Oil storage tanks at the oil depot in the port of Shanghai Yangshan
According to preliminary assessments of S&P Global data, Iran has continued to ship at least 10 million tons of oil to China in the 12 months to September, and most of its transactions with Chinese buyers are in renminbi or euros, indicating that the renminbi has played the role of oil currency, providing monetary convenience for China to increase its strategic oil reserves.
It is worth mentioning that the new news shows that Saudi Arabia, as the world's largest oil exporter, hopes to rebalance its energy strategic relationship with the United States, and is expected to further strengthen its ties with the Chinese market.
At the same time, in recent years, Chinese oil companies have begun to acquire and invest in a large number of oil and gas fields around the world, by 2026, China's implementation of crude oil refining projects will account for 24% of the share of the whole Asia, it is widely believed that most of the crude oil actually enters the strategic petroleum reserve, and according to the National Petroleum Reserve Medium and Long-term Plan, China to form a reserve equivalent to 100 days of net oil imports.
At the same time, relevant Chinese institutions have also been trying to obtain this crown jewel - RMB crude oil pricing power, according to the latest news provided to BWC Chinese reporters on November 21, the first 10 months of 2022, Shanghai RMB crude oil futures traded a total of 45.72 million lots, the transaction amount of 30 trillion, an increase of 35.2% and 113.01% year-on-year, at the same time, the average daily transaction and position size of RMB crude oil options also increased by 106% and 45% respectively.
RMB crude oil futures trading volume trend
The news shows that at present, Shanghai has formed a 24-hour continuous trading range with New York and London, which 68 international brokerage companies distributed in 25 countries and regions have launched RMB crude oil trading services, filling the gap in the Asia-Pacific crude oil market, and whether a new crude oil trading system has the active participation of foreign investors is a specific manifestation of the RMB pricing function.
Next, the analysis shows that Chinese energy buyers will also plan to further expand the settlement scope of yuan crude oil futures, which means that the dollar will not receive tolls, thereby providing convenience for investors who have the need to bypass petrodollars and hedge against the price fluctuations of crude oil futures priced in dollars.
At present, a Chinese oil major has signed the first Iranian crude import agreement to be settled in yuan, and plans to sign more such contracts in the future to further expand the settlement scope of yuan crude futures, and at the same time, oil producers such as Angola, Indonesia and Venezuela are eager to settle in yuan. Up to now, crude oil RMB futures have become one of the three major crude oil futures in the world.
For example, BP has begun to deliver crude oil to the delivery warehouse of the Shanghai International Energy Exchange, which is also since the launch of the oil yuan, major oil companies in Western developed countries began to frequently participate in the physical delivery of yuan crude oil futures, in this regard, former British central bank governor Carney said that crude oil yuan futures provide a new commodity trading currency choice.
The international financial research team of BWC Chinese has also repeatedly emphasized that China, as the largest crude oil buyer, it is logical to promote the use of RMB for payment and settlement, superimposing the advantages of digital RMB and enhancing the ability to serve the real economy, which will also enhance the RMB liquidity of the global market, if the RMB is used to settle imported oil on a large scale, it will also help accelerate the speed of strategic petroleum reserves and provide a monetary basis for energy reserves in the context of sharp fluctuations in the global energy market.
In this regard, Professor Aditi Kumar of Harvard University said that this reflects that China has maintained the high value of the yuan, and previously, whether it was Russia, India, Japan or the United Arab Emirates established crude oil futures contracts denominated in local currencies to challenge the petrodollar was unsuccessful, but China's crude oil yuan futures may do what Russia and other countries have not done, and successfully done what others have tried in vain so far in the field of oil currency.
Combined with Europe, Japan and Saudi Arabia, which hold the most overseas dollars, are also setting off a de-dollarization background, the "oil-dollar-US bond" system may be heading for a dead end, which will mean that in the future, more international investors will enter the Shanghai crude oil futures market, support China's real economy, and also add a new oil currency option for traders in other oil-producing countries, but readers and friends should also be soberly aware that at present, the main benchmark of international crude oil futures is still mainly denominated in US dollars. The petrodollar will not lose its dominance anytime soon, it will certainly be a slow process. (End)