Another milestone in China’s emergence as the world’s largest foreign energy consumer has been reached, with Chinese data indicating it has now become the largest net importer of oil. Amid the emergence of the United States as an energy superpower, China reportedly imported a net 6.12 million barrels of oil per day (bpd) last December, exceeding for the first time U.S. net imports of 5.98 million bopd.
While the United States has remained the world’s largest net oil importer on an annual basis, the margin over China has narrowed in recent years, dropping to 7.14 million bpd in 2012 compared to China’s 5.72 million.
Should current trends persist, it would mark another shift in energy geopolitics with major security and foreign policy implications.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
As previously reported by The Diplomat, energy giant BP expects the U.S. to be virtually energy self-sufficient by 2030 due to its shale gas revolution.
BP’s most recent Energy Outlook 2030 report, however, forecasted that China would not replace the United States as the world’s largest oil importer until 2017, even as it saw U.S. net imports declining by 70 percent by 2030. Consequently, as Washington enjoys its energy bounty Beijing is expected to face growing energy costs, with its import dependence rising to 20 percent from the current 6 percent.
Supporting BP’s forecasts, a new report released Wednesday by U.S. energy giant Exxon Mobil predicted a 45 percent increase in oil and natural gas production in North America by 2040, aided by growing output from U.S. shale, Canadian oil sands and the Gulf of Mexico.
Exxon Mobil expects the region to become a net energy exporter “by about 2025,” with U.S. energy consumption dropping by 5 percent by 2040 due to efficiency gains in transportation.
U.S. oil production also jumped by 800,000 bpd last year on the back of the shale boom, reducing its need for crude oil imports and decreasing its dependence on the OPEC oil cartel.
No longer dependent on overseas oil, the United States might re-evaluate its policy toward the Middle East or even in places closer to home, like Venezuela.
A reduced U.S. military presence in the Middle East and elsewhere could help shore up President Barack Obama’s rebalancing toward Asia. Former Defense Secretary Leon Panetta pledged to commit 60 percent of the U.S. naval fleet to the Pacific by 2020, which National Security Advisor Tom Donilon reaffirmed earlier this week.
“"In these difficult fiscal times, I know that some have questioned whether this rebalance is sustainable. After a decade of war, it is only natural that the U.S. defense budget is being reduced. But make no mistake: President Obama has clearly stated that we will maintain our security presence and engagement in the Asia-Pacific," Donilon said on Monday.
"Specifically, our defense spending and programs will continue to support our key priorities – from our enduring presence on the Korean Peninsula to our strategic presence in the western Pacific."
But while securing oil imports will become less of a strategic necessity for the United States, China is expected to prioritize securing resources in countries such as Angola and Sudan, where state-owned Chinese companies have invested billions of dollars.
Many regimes in places like Africa have welcomed China’s no-strings-attached aid and loans packages compared with those offered by Western donors and international organizations.
As noted by The Diplomat’s James Parker, Chinese investment in oil-rich nations such as Venezuela often includes “soft-seeming loans with fewer human rights, governance or transparency ‘strings’ attached, but with apparent requirements that much of the funding be used to contract Chinese state owned enterprises (SOEs) to build infrastructure”.
As seen with the death of Venezuelan President Hugo Chavez, this policy of building global guanxi can backfire when the ties are to individual autocratic leaders.
China’s energy investments in Western nations such as Australia and Canada have also attracted attention with critics questioning how much independence these major energy companies enjoy form the Chinese government.
With Beijing thirstier than ever for foreign oil, the scramble for global energy assets is set to intensify, potentially sparking greater divisions between East and West.