China, which is the world’s main oil importer, has bought raw materials to capacity. At present, Chinese oil storage facilities are almost filled to capacity with fuel. Bloomberg reports this citing sources. Now the world’s second largest economy is facing the challenge of finding additional storage tanks.
The PRC in 2020 became the first victim of the coronavirus pandemic and was the first to start recovering from the crisis. In 2020, Beijing, against the backdrop of falling oil prices, began buying up cheap raw materials and filling storage facilities with them. At present, the volume of fuel in reserves is approximately equal to the volume of 100 days of net imports. Inventories have recently grown to 120 days of net imports.
According to analysts, China will not stop at such a volume and will buy more oil. For Beijing, as the world’s top importer of this fuel, adequate levels of stocks are critical to maintaining the resilience of the economy in times of foreign policy shocks affecting supply and prices. The International Energy Agency (IEA) recommends that countries have enough fuel in their storage facilities to cover at least 90 days of net imports.
In 2020, China increased its oil imports by 7.3 percent. Daily fuel purchases amounted to 10.85 million barrels. In addition, Beijing boosted natural gas imports by 5.3 percent last year, Reuters reported.