From 2020 to 2022, international oil prices have experienced several roller coaster-like ups and downs. First, after the COVID-19 epidemic, oil prices plummeted to a low of US$40.
Subsequently, after the outbreak of the Russia-Ukraine conflict, there was a terrifying linear rise, reaching a peak of more than 120 US dollars. Well-known investment companies such as Goldman Sachs even declared that the oil price would break 150 US dollars within the year.
However, the oil price situation has changed dramatically in recent times, and the price of oil has fallen sharply again. The latest "WTI August crude oil futures" price has dropped to US$108. Whether it will rise or fall in the future is still unclear.
Affected by international oil prices, China also ushered in a rare wave of "10 rises and 2 falls" adjustments this year.
In the past six months, gasoline prices have increased by 2,400 yuan/ton, and diesel prices have increased by 2,310 yuan/ton . This means that each private car owner has to pay more than 90 yuan more to fill up with gasoline.
In sharp contrast to the high international oil prices, Iran oil prices are so different.
Compared with the oil prices in other countries with an average price of at least 4,000 yuan/ton, the price of Iranian oil is only 3,330 yuan/ton, which is equivalent to a price of 60 US dollars per barrel. The price of cabbage is not an exaggeration.
The largest buyer of Iranian oil is China.
For more than two years, China has ignored the threat of US sanctions and purchased oil from Iran on a large scale. The peak this year reached 1 million barrels per day.
But why do so many cheap prices not lower domestic oil prices? Is there any special secret in it?
(Iranian oil pipeline)
(1) Not afraid of U.S. sanctions. China and Iran report together to warm up
In the world oil market, Iran has long been at the forefront of Middle East oil exporters with its fourth largest oil reserves in the world. Position, oil revenue accounts for more than half of the country's income. Without oil, Iran's economy would be cut off.
Therefore, whenever the situation between the United States and Iran worsens and the Iranian nuclear issue reaches a deadlock, the United States repeatedly resorts to the tried and tested weapon of oil sanctions to attack Iran.
(U.S. Sanctions on Iranian Oil)
The most famous one is the sanctions imposed by Trump in 2018, which forced Iran's oil exports to drop from the peak of 2.5 million barrels per day to less than 1 million barrels per day, which led to Rising inflation in Iran has triggered a wave of massive protests.
Iranians are faced with the dilemma of having oil in hand but not being able to sell it. In sharp contrast, China's demand for energy has become increasingly intense with its explosive economic growth in the past two decades.
Although it has the 13th largest oil reserves in the world, it cannot satisfy the hungry demand for oil. Its dependence on foreign oil reaches more than 70%. China's energy security is increasingly controlled by others.
(China and Iran signed a 25-year comprehensive cooperation agreement)
The common interests and needs have brought China and Iran together naturally.
Starting in 2020, China and Iran announced the launch of a 25-year cooperation agreement. China has obtained a long-term and stable supply of high-quality Iranian oil from the agreement.
According to Reuters report, Iran transported more than 30 million barrels of crude oil to China in March this year alone.
averages more than 1 million barrels a day, and almost all oil tankers departing from Iranian ports are orders purchased by China.
China imports so much oil from under the nose of the United States. Isn’t it worried about the big stick of US sanctions?
In fact, although Americans are well aware of China's actions and are extremely dissatisfied with them, the situation is stronger than others.
What the United States is facing this year is the surge in international oil prices caused by the conflict between Russia and Ukraine, and the domestic people in the United States are suffering from high oil prices.
The Biden administration is unable to obtain guarantees from countries such as Saudi Arabia to increase oil production. As the midterm elections approach, how to stabilize oil prices and appease voters has become a major headache for Democratic politicians.
Therefore, it is not difficult to understand that we should turn a blind eye appropriately and give the green light to Venezuela and Iran, our mortal enemies, to slightly relax sanctions to increase supply in the global oil market and reduce the momentum of skyrocketing oil prices.
Even if China benefits greatly from extremely cheap Iranian oil, Americans can only shake their heads and accept it.
(2) Iranian oil was sold to my country at a conscientious price and China took a big advantage
Affected by the endless sanctions by the United States, the Iranian currency rial has plummeted, falling 300% relative to the US dollar in ten years.
This means that imported goods from Iran have become cheaper, coupled with the reduction of sales channels, the number of buyers has dropped significantly, Iranian oil has naturally started a downward path.
How cheap is Iranian oil? For example, in the first quarter of this year, among the top ten source countries of my country's imported oil, Saudi Arabia, which sold the largest amount, sold 4,027 yuan/ton to my country. The most expensive
is the United Kingdom, which is sold to my country for 4,567 yuan/ton. Even Russia, which has "no ceiling" with my country, still sells for 4,045 yuan/ton.
In comparison, the price of Iranian oil of 3,330 yuan/ton seems extremely cheap.
It should be pointed out that there has been a recent rumor on the Internet that the price Iran sells to my country is US$4/barrel. This is actually pure nonsense.
You must know that the cost of producing a barrel of oil cannot be as low as $4. For example, the cost of mining in Siberia, Russia, is as high as 60-70 US dollars.
Even if the Iranians have a good relationship with China, they cannot make money at a loss and sell oil to our country at a loss. At the very least, basic profits must be guaranteed.
In any case, China has truly made a fortune from the China-Iran oil trade.
So the question is, since China imports millions of barrels of oil from Iran on average every day, why has it been unable to suppress the crazy rise in domestic gasoline prices for several months? Is all this cabbage-priced oil wasted?
(3) A drop of water cannot put out a fire, no matter how cheap oil is, it is difficult to alleviate the high oil prices
Many people seem to think that this number is impressive when they see the oil import volume of 1 million barrels a day, but in China's huge oil industry in all walks of life Given the demand, this number is really not enough.
As early as 2011, China's average daily oil imports had reached an astonishing 6.3 million barrels.
html After 2006, China surpassed the United States to become the world's largest oil importer with 10.24 million barrels.In 2020, import volume jumped again to an astronomical figure of 12.87 million barrels, exceeding the sum of EU countries.
It is not difficult to see that no matter how low the price of cheap oil is, the average daily price of 41 million barrels is still limited to 12 million barrels, not to mention that the price of the other 11 million barrels cannot remain unchanged.
When the two offset each other, cheap Iranian oil will always be diluted, just like a few drops of water can't quench the thirst of a tourist in the desert.
Speaking of this, some people may say, Since Iranian oil is cheap, wouldn’t it be enough to buy all 12 million barrels from Iran?
This is a typical mentality of game control players.
First of all, Iran's average daily oil production cannot reach 10 million barrels at all. Its historical peak is only more than 2 million barrels, and the increase is less than 10 million barrels.
Even if it is said that China has increased its oil and gas investment in Iran at any cost, achieving an increase of tens of millions of barrels.
For Iran, oil, a non-renewable resource, needs to be used less. It is already facing a certain amount of pressure domestically to extract 1 million barrels of cheap oil and sell it to China, let alone 10 million barrels.
Secondly, eggs cannot be put in one basket. Although China has a good relationship with Iran, it would be too risky to rely on Iran for all its oil.
Once Iran's political situation changes suddenly and a comprehensive oil embargo is announced, it will be an unbearable burden for my country's energy security.
Therefore, in the past few decades, China’s oil imports have never put the weight on one country. Generally, it is more evenly distributed here and more distributed there.
From Middle Eastern countries such as Saudi Arabia, Iraq , and Iran to Angola , Venezuela and other African and South American countries, China's oil imports are always spread out as much as possible to avoid hanging on a tree.
Furthermore, Americans have always been concerned about China's purchase of Iranian oil. Because the import volume is still low, it is still at a tolerable stage.
If the Americans break out and completely increase sanctions, or cut off China-Iran oil trade channels by sea, the consequences will be unimaginable.
In addition, domestic oil prices have repeatedly remained high, which is also inseparable from my country's special oil price control mechanism.
(4) China's oil price control mechanism: ceiling + floor It is difficult for oil prices to rise or fall greatly
Speaking of the key factors that restrict China's uncontrolled import of oil, one thing that must be mentioned in is to protect our country's local oil industry.
As mentioned earlier, China is the country with the 13th largest oil reserves in the world. 30% of its oil depends on the local oil industry. PetroChina, and Sinopec have made huge contributions to our country’s tax revenue and supported many workers in related industry chains. .
In 2013 alone, Sinopec contributed 355.7 billion yuan in taxes and fees to our country, accounting for 2.34% of our country’s fiscal revenue that year, greatly enriching our country’s treasury.
As the saying goes, "Millions of canal workers depend on their food and clothing, and it is absolutely forbidden to abolish the canal system and change the sea."
Even if China puts aside energy security factors and imports cheap foreign oil without restrictions, it must also take into account the production and sales status of domestic oil companies.
Increased imports on one side, and squeezed domestic production on the other.
Just imagine, imported oil has replaced local oil, and a large number of domestic oil fields have been shut down, which will not only bring corresponding tax revenue and employment decline.
This will also waste the equipment costs that have been invested in the early stage, and restarting the oil field facilities again in the future will be a huge expense.
At the same time, China Petroleum mining cannot just dig a hole and spew out a steady stream of oil.
Especially compared with the cost of US$10 in Middle Eastern countries, most of China's oil extraction is buried deep, the domestic average cost is US$40, and the cost of offshore oil extraction is as high as US$60.
If oil prices are too low, it will harm the profits of domestic oil companies.
Therefore, out of the need to protect the local oil industry, China's oil prices cannot adopt full market prices, but are regulated in the form of guide prices.
According to the Petroleum Price Management Measures released in 2016, China has adopted a "ceiling + floor" price control model.
When international oil prices fall below the floor price of US$40, domestic oil prices will not continue to fall.
When international oil prices are higher than the ceiling of $130, domestic oil prices will basically not rise accordingly.
Only when the international oil price is between 40 and 130 US dollars, the domestic oil price will adjust accordingly.
sets the threshold of $40, which is actually based on the average mining cost of my country's oil companies of $40.
Therefore, in the past six months, international oil prices have risen repeatedly, but have not exceeded the ceiling price of US$130, so domestic oil prices have adjusted upward accordingly.
But as soon as there is any sign of a decline, such as the drop in international oil prices last week, the price of domestic refined oil products dropped by 320 yuan/ton.
Therefore, the upward and downward adjustment of domestic oil prices does not ultimately depend on the price of imported oil from Iran.
Even if the import per barrel is US$0, as long as the international oil price continues to rise in the range of below US$130 and above US$40, there will be little room for domestic oil prices to fall.
It is worth mentioning that China first-hand imports cheap Iranian oil, and on the other hand, it also takes advantage of the price reduction of Russian oil after the Russia-Ukraine conflict to urgently purchase Russian oil and gas.
According to customs data in May, China's oil imports from Russia have exceeded Saudi Arabia. Such a large amount of low-priced Russian and Iranian oil has made China more comfortable in adjusting oil prices.
The iron triangle formation of China, Russia, and Iran is becoming increasingly consolidated.
On June 28, 2022, Iran officially announced its application to join the BRIC countries and cooperate more closely with China and Russia.
(China, Iran, and Russia held joint military exercises in the Indian Ocean)
If the energy of Iran and Russia, coupled with China’s manpower and market, can be effectively integrated, it will surely form a perfect effect of 1+1+13, which will make the United States fearful. Three points.
