Chinese Legislators Want Increased Strategic Oil Reserves
These oil tanks are part of China’s strategic reserves, but some legislators think they’re not enough. (image: wsj.com)
Some lawmakers in China are calling for an increase in the country’s stockpile of crude oil and refined oil products, Reuters has reported. As China’s energy consumption grows, these lawmakers are concerned that an increasing reliance on oil imports will jeopardize the country’s energy security.
China has already embarked on an expansion of its strategic petroleum reserves, adding 170 million barrels of capacity to preexisting reserves of 102 million barrels. However, Chen Geng, a member of the National People’s Congress, said that the “current state crude reserves are far lower than sufficient.” According to Chen, China will have to import 350 million metric tons of oil (roughly 2.5 billion barrels) by 2020, and Chen called for greater stockpiles to soften the threat that such reliance on imports poses to energy independence. Another member of China’s parliament called for the state to increase its reserves of refined oil products in addition to its crude reserves.
Energy policy in China has been dictated by an insistence on self-sufficiency since the rule of Deng Xiaoping in the 1980s, as HeatingOil.com contributor Jeff Jorve explained. China’s investment in green technology and in vast supplies of petroleum and petroleum products are each aimed at the same end—energy independence.
While China’s energy policy may be driven by longstanding domestic concerns, the country’s actions affect oil consumers around the globe. Whether China buys oil and oil products to use them or to store them, the market registers it as additional demand, which pressure the prices of crude oil and heating oil to rise.
