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December 27, 2005
China's Oil Appetite
By: Rowan Wolf
It is not news that China is making deals with virtually everyone to meet their growing oil needs. Therefore, the amicable agreement between China and North Korea on oil exploration in the Yellow Sea is not too surprising. There is estimated to be 29 billion barrels of oil in the Yellow Sea, and both China and North Korea could use them. China is also in discussions with OPEC for an additional 350,000 barrels per day for 2006.
China consumes approximately increase consumption by about 7.5% a year. Of course China has a long way to go to reach the U.S. level of approximately 20 bbp (and growing). However, in a world increasingly defined by oil limitations, increasing oil consumption causes both competition and conflict.
China is working with Russia, Venezuela, Iran, and now North Korea - all nations that are on the "not most favorite" U.S. list. OPEC is definitely linked to its largest consumer (the U.S.), but oil is oil, and money is money. China is up and coming. The U.S. seems to be stumbling. Which horse would you back - particularly if China is carrying much of the U.S. debt load?
Posted by Rowan at December 27, 2005 6:48 AM Category: Peak Oil