Is It Feasible for China to Optimize Oil Import Source Diversification?

Jian Xu,Qin Yao,Wei Zhang,Jin-Suo Zhang

doi:10.3390/su6118329

Abstract

In 2013, China imported 282 million tons of crude oil with an external dependence of 58.1%, surpassing the USA as the world’s largest net oil importer. An import source diversification strategy has been adopted by China to ensure oil supply security and to prevent oil supply disruption. However, the strategy is restricted by the imbalance of oil reserves. What is the reasonable and clear objective of the diversification strategy under an imbalanced environment? How do we assess the natural imbalance? This paper analyzes the oil import diversification of China and the USA, as well as the oil production of oil export countries by the oil import source diversification index (OISDI). Our results are as follows: the distribution of oil import sources for China tends to coincide with the oil production distribution of oil exporters in the world. Compared with the USA, China has more diversified import sources. The Chinese government paid much attention to import sources in the past. In the future, China will adjust the distributions of regional sources rather than focus on the number of sources to further optimize the structure of imported regions in the course of implementing the import source diversification strategy.

Highlights

In 2013, China imported 282 million tons of crude oil with an external dependence of 58.1%, surpassing the USA as the world’s largest net oil importer
China’s oil import diversification strategy is market-oriented, which focuses on a short-term market and can meet the demands of the domestic markets in the short term; it is more susceptible to short-term fluctuations of the oil market
0.669, which is close to the oil production diversification index of oil exporters, 0.622, and lower than the oil exporters’ reserve diversification index, 0.79

Summary

Introduction

In 2013, China imported 282 million tons of crude oil with an external dependence of 58.1%, surpassing the USA as the world’s largest net oil importer. China’s oil imports have increased over the years, as shown, and in response to the rapid growth in world oil demands, China has adopted a positive import source diversification strategy, which has been recognized by countries all over the world as preventing some individual countries from reducing or stopping their oil supply. Since China became a net oil importer in 1996, the number of major oil importing countries has increased from 11 to 35. China has developed some overland oil import channels, building oil pipelines with Kazakhstan, Russia and Myanmar, which, to some extent, has reduced the risk from oil importing that China faces.

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Conclusion