From: lessgovt@gmail.com   
      
   China’s Economic Stake in the Middle East: Its Thirst for Oil   
   By Keith Bradsher, Oct. 11, 2023, NY Times   
   No country buys more oil from Saudi Arabia, the world’s second-largest   
   producer behind the U.S. Half of China’s oil imports, and a little over 1/3   
   of all the oil burned in China, comes from the Persian Gulf, according to   
   Andon Pavlov, the lead    
   refining and oil products analyst at Kpler, an analysis firm in Vienna.   
      
   China has also started buying more oil from Iran, a longtime backer of Hamas,   
   the group behind the attack. China has more than tripled its imports of   
   Iranian oil in the past two years and bought 87% of Iran’s oil exports last   
   month, according to Kpler,    
   which specializes in tracking Iran’s oil exports.   
      
   China “is highly exposed to the current instability in the Middle East,   
   especially if it escalates,” said Philip Andrews-Speed, a longtime   
   specialist in China’s oil policies at the National University of Singapore.   
      
   China, the world’s 2nd-largest economy, has become addicted to foreign oil   
   at a stunning pace. As recently as the early 90s, China was self-sufficient in   
   oil. Now it depends on imports for about 72% of its oil needs.   
      
   By comparison, the U.S.’ reliance on imported oil peaked at about 60% around   
   2005, before the fracking boom transformed the U.S. into a net exporter.   
      
   Xi Jinping has kept energy security as one of the country’s top priorities   
   through his decade in office.   
      
   “Energy supply and security are crucial for national development and   
   people’s livelihoods, and are a most important matter for the country that   
   can't be ignored at any moment,” Xi said in July.   
      
   To that end, China has made giant investments in electric vehicles. It now   
   dominates the world’s production of electric cars, and by August 1/3 of the   
   cars sold in China were electric, said Bill Russo, a Shanghai automotive   
   consultant.   
      
   But gasoline consumption has stayed high, as new car sales gradually change   
   the overall fleet of mostly gasoline-fueled vehicles on China’s roads.   
   Driving has also surged this year, including during a weeklong national   
   holiday this month, because China    
   ended nearly 3 years of “zero Covid” measures that restricted travel.   
      
   Another reason for China’s oil thirst: It is the world leader in the   
   production of petrochemicals, which are made from oil and natural gas.   
      
   China has little chance of shaking its reliance on oil imports, said Lin   
   Boqiang, the dean of energy studies at Xiamen University in Xiamen, China.   
   “Looking forward, I do not believe it can decrease substantially,” he said.   
      
   China does not officially acknowledge buying any oil from Iran, which is under   
   broad international sanctions as it attempts to build nuclear weapons. But its   
   purchases have been well documented by industry experts.   
      
   Iran relies on shipping oil aboard tankers that turn off their automatic   
   location transponders, sometimes for weeks at a time, and often don’t turn   
   them on again until they reach high-traffic waterways like the Strait of   
   Malacca next to Malaysia.   
      
   China’s official statistics instead show Malaysia as one of China’s   
   largest suppliers of oil, even though Malaysia has limited and shrinking oil   
   production from aging oil fields.   
      
   Refineries in China that turn crude into gasoline and other products have   
   shifted to buying more oil from Iran because Iranian oil is now cheaper than   
   Russian oil, Pavlov said. Iranian oil sells at a discount to world prices of   
   about $10 a barrel,    
   despite sanctions, while Russian oil sells at a discount of about $5 a barrel,   
   despite sanctions, he said.   
      
   “China always goes with what is cheapest,” he said.   
      
   While Russia has a long border with China, infrastructure limits Russia’s   
   ability to ship more oil south.   
      
   Officials from Russia, China and Mongolia have held a long series of   
   discussions over the past year on whether to build a natural gas pipeline,   
   called Power of Siberia 2, that would link Russian gas fields across Mongolia   
   to China. Building such a    
   pipeline could allow oil shipments alongside it.   
      
   Putin has said he will attend Xi’s Belt and Road Forum in Beijing next week,   
   reawakening speculation in the global energy industry on whether a pipeline   
   deal might finally be concluded. But a pipeline would take many years to build   
   and cost tens of    
   billions of dollars.   
      
   “I’m highly skeptical of the pipeline’s commercial logic, but energy   
   security and geopolitics might ultimately trump economics,” said Joe   
   Webster, a senior fellow at the Global Energy Center of the Atlantic Council,   
   a Washington research group.   
      
   Some of the oil that China buys is being put in storage tanks, which it is   
   building at an even faster rate than its oil consumption has risen. China does   
   not release figures for its reserves, but they are believed to be   
   considerable. Most experts guess    
   that China’s oil reserves equal about 90 days of imports, which long has   
   been the minimum that the United States has set for its Strategic Petroleum   
   Reserve.   
      
   Energy security is not the sole factor in China’s decision-making on Mideast   
   issues, said Bonnie Glaser, the director of the Indo-Pacific program at the   
   German Marshall Fund of the United States, a Washington policy research group.   
      
   Beijing has tried hard to stay on friendly terms with the Islamic world even   
   as China has cracked down on predominantly Muslim minorities in its far   
   western region, Xinjiang. China has also tried to maintain relations with both   
   Israel and Palestinians.   
      
   “The only way China has been able to achieve that goal is to avoid getting   
   deeply involved,” Glaser said.   
      
   But whether China can maintain its distance from the Mideast’s troubles is   
   less clear.   
      
   “Since America doesn’t import much oil from that part of the world, the   
   countries in that part of the world start to think how their geopolitical   
   alliances will be reshaped in the decades to come,” said Kevin Tu, a Beijing   
   energy consultant. “   
   China has become a major stakeholder in this region whether it likes it or   
   not, and China needs to play a role to stabilize the region in the years to   
   come.”   
      
   https://www.nytimes.com/2023/10/11/business/china-oil-saudi-arabia-iran.html   
      
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