Skip to main content

Chinese petroleum and other liquids

Hydrocarbon Engineering,

  • China holds 24.6 billion bbls of proved oil reserves.
  • China’s total petroleum and other production, the fourth largest in the world, has risen approximately 50% over the past 20 years.
  • Production growth has not kept pace with demand growth.
  • Last year China produced nearly 4.6 million bpd of petroleum and other liquids.
  • EIA forecasts that China’s oil production will increase slightly to higher than 4.6 million bpd by the end of 2016.
  • The country accounted for more than one third of global oil demand growth in 2014.
  • China consumed 10.7 million bpd of oil in 2014.
  • EIA forecasts that China’s oil consumption will continue growing through 2016 at a moderate pace to 11.3 million bpd.
  • It is also forecast that China’s oil consumption will exceed that of the US by 2034.
  • Diesel is a key driver of China’s oil products demand.
  • Diesel demand did decline on an absolute level in 2014 for the first time in 20 years.
  • Gasoline, the second largest consumed petroleum fuel is still experiencing robust demand growth.
  • LPG continues to experience some growth from the petrochemical industry but fuel oil demand has weakened considerably.

Sector organisation

  • The Chinese government’s energy policies are dominated by the country’s growing demand for oil and its reliance on oil imports.
  • The government launched the National Energy Administration (NEA) in 2008 to act as the key energy regulator.
  • China’s national oil companies (NOCs) wield a significant amount of influence in China’s oil sector.
  • The government launched a fuel tax and reform of the domestic product pricing mechanism in 2009 in an effort to tie retail oil product prices more closely to international crude oil markets.

Overseas activity

  • Since 2008, the NOCs have purchased assets in the Middle East, North America, Latin America, Africa and Asia and invested approximately US$73 billion.
  • By the end of 2013, Chinese NOCs had secured bilateral oil for loan deals with several countries, amounting to approximately US$150 billion.

Crude imports

  • Oil imports have increased dramatically over the past decade, reaching record highs in 2014.
  • China has made great efforts to diversify the sources of its oil imports.
  • Total net oil imports, driven primarily by crude oil imports, now outweigh domestic supply.
  • The current Five Year Plan targets oil imports reaching no more than 61% of its demand by the end of this year.
  • The Middle East is the largest source of China’s crude oil imports.


  • China has steadily expanded its oil refining capacity to meet its strong demand growth and to process a wider range of crude oil types.
  • The country now ranks behind only the US and the EU in the amount of refining capacity.
  • This year, installed crude refining capacity hit 14.2 million bpd.
  • Refinery utilisation rates have declined to less than 75% in the past year.
  • The refining sector has undergone modernisation and consolidation in recent years, shutting down dozens of teapot refineries.
  • Domestic price regulations for petroleum products resulted in revenue losses for Chinese refineries when international oil prices were high.
  • China became a net diesel fuel exporter in mid 2012.
  • Sinopec and CNPC/PetroChina are the two dominant players in China’s oil refining sector.

SPR and storage

  • The country is in the process of developing significant storage capacity to buffer geopolitical issues involving global oil supply.
  • The SPR involves three phases and calls for China to construct facilities that can hold 500 million bbls of crude by 2020.
  • At the beginning of last year, China held approximately 350 million bbls of commercial crude oil storage capacity.

Edited from report by Claira Lloyd

Read the article online at:


Embed article link: (copy the HTML code below):