BEIJING, Aug 20: China will need to spend $500 billion a year on foreign crude oil by 2020, with the country likely to overtake the United States as top oil importer by 2017, energy consultancy Wood Mackenzie said in a report published Tuesday.
Woodmac forecast China’s total imports would rise to 9.2 million barrels per day (bpd), up from 2.5 million bpd in 2005, while U.S. Imports will fall from a peak of 10.1 million bpd to 6.8 million bpd by 2020.
‘By 2020, 70 percent of China’s oil demand will come from imports. On the other hand, US import requirements will reduce due to tight oil production,’ said William Durbin, Woodmac’s President of Global markets.
Durbin said the trend meant that many traditional suppliers to the United States from the Organisation of Petroleum Exporting Countries (OPEC) would be ‘compelled to shift their focus towards China.’
China’s demand growth would be driven largely by soaring gasoline and diesel demand, with China’s total fleet of personal auto vehicles likely to rise to 160 million from 20 million over the 2005-2020 period, making it second only to the United States in car ownership, Woodmac said.
China’s $500 billion annual cost by 2020 for oil imports would top the peak U.S. Spend of $335 billion, Woodmac said. It also forecast that U.S. Import costs would drop to $160 billion by 2020, with the quality of Chinese imports rising and North American buyers taking more discounted heavy and sour crudes.
Earlier this month, the U.S. Energy Information Administration forecast China to overtake the United States as the largest crude oil importer by as early as October this year on a monthly basis, and by next year on an annual basis.
China imported 5.42 million bpd of crude oil over the whole of 2012, compared to 8.49 million bpd in the United States.
(AGENCIES)
Follow our WhatsApp channel