Pierre Level,--President of the Asia Pacific Region, Argus Media Limited

Summary:

China has surpassed the United States as the top energy consumer and the largest oil importer in the world, so it is bound to play a very important role in the global energy market. The pricing of transportation fuel determines the price of and demand for crude oil. The price of oil will reach a new equilibrium at 100 dollars per barrel. The fall of transportation cost further boosts the trading volume of oil. New changes have emerged in the supply of unconventional oil. It is our hope that a transparent and reliable pricing mechanism can be established to promote international energy trade.

We look forward to a freer and liberalized energy market in China, which can enable the country to participate in the global energy market. There has been unprecedented economic growth in China over the last decade which has never occurred in other places of the world. In the period, state-owned oil giants in China have purchased overseas petroleum resources, but there is still a shortage of about three to nine million barrels per day. The liberalization of the global market is key to the bridging of the gap of supply and demand in China. From January 2011 to July this year, Iran’s output dropped significantly while Iraq, Saudi Arabia and some non-OPEC countries filled up this gap in supply. It is expected that Iraq will provide supply for about half of the new demand in the next year. Probably, Iraq will become the third largest oil supplier for China.

The major route of oil trading has shifted from the Atlantic to the Pacific. In the next two decades, oil trading in emerging Asian countries is expected to grow. For the first time in history, America’s oil output has surpassed its import, so oil exporters in West Africa, Europe and Latin America have to find new market for their output, especially in Asia. Most Asian countries will import more oil, especially India. Undoubtedly, China will be the most prominent oil importer in Asia.

According to Argus Media Limited, it is time for Asia to play a leading role in global energy market. In particular, China will take more measures to liberalize its trading environment and thus expand its influence in the world.