China set to become largest net oil importer

China's net oil imports are very likely to exceed those of the US by October this year on a monthly basis and by 2014 on an annual basis, making China the largest net oil importer in the world, the US Energy Information Administration (EIA) said in a forecast released on Friday.

The switch comes as the US continues to boost domestic energy supply while China's energy demand remains robust. The EIA said that net liquid fuel imports in the US are expected to drop to 6.23 million barrels per day in October and that of China to top 6.45 million barrels per day.

But Zhou Dadi, vice-chairperson of the China Energy Research Society, believes that though the net oil imports of the two countries are very close at present, it is not certain that China will top the US in oil imports in October.

Energy demand in the US may not show the expected drop in October as heating demand may climb with winter comes, Zhou noted.

China's demand of imported oil has been consistently on the rise, with crude oil imports rising 1.4 percent to 164 million tons in the first seven months and gasoline imports increasing 6.6 percent to 24.85 million tons, data from the General Administration of Customs (GAC) showed Thursday.

During the same period, 1.04 million tons of crude oil and 16.73 million tons of gasoline products were exported, said the GAC, which means that China had nearly 6 million barrels of net liquid fuel imports per day in the first seven months of the year.

China now imports around 60 percent of its oil consumption, but the US reliance on foreign oil is declining - less than 50 percent at present according to media reports, as its domestic production of shale oil, tight oil and other alternative energy such as shale gas is increasing.

"It is only a matter of time for China to surpass the US in net oil imports. The most important thing is to find solutions because as the largest oil importer China will be very vulnerable to oil price changes," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

The US has played an important role in stabilizing global oil prices and also maintaining order in major oil producing countries. However, the US will be less motivated to do so with less reliance on imported oil, experts said.

Lin noted that at present China is still not capable of playing such a major role and the only thing it can do now is to save energy as well as diversify oil sources to guarantee energy security.

Around 60 percent of China's oil imports are from Middle East oil producers at present, and Lin said that Russia would be a good option as an oil source for China, as both the domestic situation in Russia and transportation of Russian oil carry lower risks.

Domestic energy production would not help much in reducing China's reliance on oil imports, as our efforts to boost natural gas supply and explore other substitutes such as shale gas have not yielded any major breakthroughs, Lin noted.