According to Reuters on July 1, China has issued 52.69 million tons of crude oil import quotas to 36 non-state-owned refineries in the second batch of grants in 2022, an increase of 49.5% over the same period last year. So far this year, the new quota has brought China's total non-state-owned import quotas to 161.72 million tons (up 2.5%), compared with 157.83 million tons in the same period in 2021. Reuters said that in May, China's total crude oil imports rose nearly 12% from a low base a year ago.
An oil warehouse in a port in Zhuhai, China
According to data from GlobalData, a global oil industry research agency, on June 29, China will account for 24% of Asia's upcoming crude oil refining projects by 2026, and is expected to start operating 44 crude oil refining projects (8 are new projects) between 2022 and 2026 to meet the growing demand for petroleum products and petrochemical products. China is continuing to rapidly expand its refining and oil storage capabilities.
According to data released by the General Administration of Customs on June 9, China's largest crude oil buyer, the world's largest crude oil buyer, increased slightly in May compared with April, importing 45.825 million tons (43.03 million tons in April), equivalent to 10.8 million barrels per day (1 ton is about 7.3 barrels of crude oil). In comparison, it was 10.06 million barrels per day in March this year, and the average daily rate in 2021 is 10.3 million barrels per day.
This also made China import a total of 217 million tons of crude oil in the first five months of 2022, indicating that 217 million tons of crude oil have continued to arrive in China. China is the world's second largest crude oil consumer and the largest crude oil importer, accounting for 44% of the global oil demand growth.
In addition, according to the latest data released by the National Bureau of Statistics, from January to May 2022, the crude oil processing volume of Chinese refineries was 277.6 million tons, or 13.4 million barrels per day. During this period, China's crude oil production also increased by 4.1% compared with the same period last year to 85.69 million tons, and the strongest growth in the past decade. At the same time, China has also resumed its strategic crude oil reserves since the first quarter of 2022.
In fact, there is no commodity in the global economic field that represents crude oil, which is described as "black gold", but we have been working hard to obtain the international crude oil pricing power in the crown. At the same time, strategic oil reserves are an indispensable economic blood, which is of great significance to ensuring the energy supply of various economic sectors and stabilizing oil prices.
According to the Financial Times and Reuters on June 27, shipping activities indicate that some refineries in China have been buying oil from the international market at lower discount prices in recent months, and the purchase volume has increased since April and is showing an upward trend. Data shows that in May, Chinese energy buyers purchased crude oil and petroleum products from some countries by about 86,000 barrels higher than the average level of in the same period in 2021.
In this regard, according to satellite data released by energy analysis company OilX on June 21, Chinese energy buyers seem to have stored a large amount of strategic oil reserves. For example, according to data released by customs on June 20, China imported 260,000 tons of Iranian crude oil in May, and in the past few weeks, Chinese buyers have purchased at least 4 million barrels of Iranian crude oil, and most transactions are conducted in RMB.
In terms of oil currency trading, according to the latest data provided by the Last Futures Exchange to BWC Chinese reporter a week ago, as of the end of May, the trading volume of RMB crude oil futures was about 329 million lots, or 329 billion barrels. In the first quarter of this year, its daily trading volume was an average of 230.8 million barrels, and the average daily open interest was 71,500 contracts.
At present, RMB crude oil futures are the third largest crude oil futures in the world, second only to WTI and Brent crude oil futures denominated in US dollars. Nearly 70 international brokerage companies have launched RMB crude oil trading services, which has attracted participants from 25 countries and regions including the United Kingdom, Switzerland , the United Arab Emirates, and 75 overseas intermediary institutions have also been registered, including JPMorgan Chase , Goldman Sachs , Ruisui Securities, BNP Paribas , Industrial Bank and other international investors.
You should know that whether a new oil monetary system has the active participation of foreign investors reflects the pricing ability. The increasing number of international participants conducting continuous transactions is also a link connecting China's crude oil futures and the international spot market, and it is also a concrete manifestation of the RMB's pricing function, especially in Northeast Asia region, it has become an effective tool for energy companies engaged in crude oil production and operation to hedge the risks of large fluctuations in oil prices and support China's real economy.
Therefore, according to Reuters' analysis, in the future, some international energy participants including Iran, Indonesian , Angola , etc. will use more RMB and Chinese energy trading parties for settlement. According to the Nikkei Asian comment, it is best to use the RMB and yen to settle and trade oil in the Asian market, and this new change provides convenience for more oil trading and reserves.
BWC Chinese website International Financial Research Team once again investigated more than a dozen U.S. crude oil futures market traders through online and telephone in the week of June 30. The results showed that they said that in the past four years of RMB crude oil trading, the pricing power function has begun to appear, and the price fluctuations in the global crude oil futures market and trading volume have been driven, and the most direct manifestation is that they also have to start frequently watching the night trading of RMB crude oil futures.
You should know that before the Shanghai crude oil futures contract was listed, the international trading volume in the past Asian period was very light and the price fluctuated very little. This vivid footnote means that the RMB is expanding its pricing capacity for Eurasian crude oil, which means that the crude oil RMB can provide a new choice for oil-producing countries when conducting energy transactions.
In particular, the time for China's crude oil commodity retail and futures market to adopt digital currency has also been ripe. It is obvious that the Chinese version of digital currency will enhance the breadth and depth of serving the global economy and can play an alternative role in the transformation of international settlement system .
Of course, friends should also be clear-headed that considering that the US dollar is the investment currency, settlement currency, reserve currency and safe-haven currency of international commodities and financial assets, 80% of the world's oil is traded in US dollars, so any transformation away from the US dollar will be a slow process. After all, which currency to choose to trade oil is determined by the market.
However, more importantly, if Chinese energy buyers use RMB to buy and settle imported crude oil on a large scale, this will help speed up their construction of strategic oil reserves, and at the same time, it will directly help hedge the premium risks brought by the sharp fluctuations in the US dollar exchange rate. (End)
