The development and problems faced by my country's oil trading industry

In recent years, the economies of Asia-Pacific countries have continued to develop, and the Asia-Pacific region has become the fastest growing economic region in the world today. Through a large amount of economic data, the author analyzes the current situation of international oil trade, and discusses the development trend and main problems of my country's oil trade. He believes that the current establishment of oil futures and the increase of strategic oil reserves in my country are crucial to strengthening my country's oil security. Strategy is extremely important.

International Crude Oil Trade Status

Asia is the world’s largest crude oil importer, accounting for 47% of the world’s crude oil imports. The stagnant and shrinking demand for crude oil in the United States and Europe has promoted Asia’s global importance. The share of crude oil trade increased. It is expected that from 2011 to 2016, the growth of crude oil demand and refining capacity in Asia will drive the demand for crude oil and oil tankers in Asia. The rapid increase in Asia's refining capacity has met growing domestic demand, and the improvement in refining capacity will promote the growth of Asia's crude oil imports.

Oil prices fluctuate sharply, and my country’s crude oil pricing is in a passive state. The WTI oil price increased from US$99.65/barrel at the end of 2011 to US$109.91/barrel. In June 2012, the WTI oil price dropped to US$77.69/barrel. Brent oil price rose from US$106.51/barrel to US$126.47/barrel, then dropped to US$91.35/barrel in June 2012. Since Brent crude oil futures are very liquid, and the spread trading between Brent crude oil and Dubai crude oil is also very active in the over-the-counter market, WTI crude oil futures and Brent crude oil futures have become the crude oil pricing benchmarks in North America and Europe. Most crude oil trade in Asia refers to the spot price assessment of Dubai crude oil, but the price of Dubai crude oil depends on the price difference between Brent crude oil futures price and OTC market trading between Brent crude oil and Dubai crude oil. Asia lacks an independent , the authoritative crude oil pricing benchmark.

The current situation of my country’s oil trade

my country’s oil consumption has grown at an average annual rate of 7.3%. In the past 20 years, oil consumption has increased by nearly 280 million tons, accounting for 50% of the annual growth in oil consumption in the Asia-Pacific region. Accounting for 35% of the world's oil consumption growth. Oil consumption accounts for more than 10% of the world's total, and both consumption and import volume have surpassed Japan, making it the world's second largest oil consumer.

Importing crude oil is the main method of oil trade. In 2011, China's oil trade volume reached 333 million tons, of which 300 million tons were imported and 30 million tons were exported. Among the imports, crude oil accounted for 250 million tons, accounting for 83% of the total imports. Among the exports, petroleum products accounted for 30 million tons. Accounting for 92% of total exports.

The sources of imports are diversified, with the Middle East still being the main source. In 1995, my country's import sources were mainly from the Middle East, Asia-Pacific, Africa, Europe, America, Oceania and other places. In 2011, the sources of oil in the Middle East increased, with Saudi Arabia growing significantly and now being the largest supplier. Imports from the Asia-Pacific region decreased, mainly due to the limited increase in resources and the growth of local demand; imports from Latin America and Africa increased significantly.

Imported petroleum products are mainly fuel oil. In 2011, China imported 52.16 million tons of petroleum products, of which 26.83 million tons were fuel oil, accounting for 51.4%. The growth of local refining raw materials and marine fuel supported the demand for fuel oil. The import volume of liquefied gas, naphtha, lubricating oil, asphalt, petroleum coke and other products remains at a level of 3-5 million tons.

The main exported petroleum products are gasoline, kerosene and fuel oil. In 2011, gasoline, kerosene and fuel oil exports accounted for 69% of petroleum product exports. Gasoline exports are mainly to balance market supply and demand.

my country’s oil resources have low security and high dependence on foreign countries. In 2011, China's dependence on foreign crude oil reached 56.5%, surpassing the United States' 53.5% for the first time. Import dependence on oil and natural gas will rise rapidly in the coming period. The most direct manifestation of the excessive dependence on foreign oil is that oil price pricing is in a passive situation. International oil prices rose sharply last year, with the average annual Brent oil price reaching $111.23 per barrel, an increase of 39.9%, the highest level in history.

Transportation channels are diversified, mainly reflected in maritime transportation, and the volume of land pipelines has increased. The China-Russia, China-Kazakhstan, and China-Myanmar pipelines will become important sources of my country's land oil imports.

The construction of midstream and downstream infrastructure is the key to oil trade

Midstream and downstream facilities mainly include three categories: refining facilities, warehousing facilities, and logistics facilities. First, the refining facilities. Since the traded products include refined oil, refining facilities are required to process the crude oil.

Secondly, warehousing facilities. Both crude oil and refined oil products traded require storage bases. At present, Singapore has become the largest oil storage, logistics and trading transfer base in the Asia-Pacific due to its geographical location. Singapore is the third largest oil trading center and the first in the world after New York and London. Large marine fuel port.

In China, the warehousing industry is expanding rapidly, and the market entities in the warehousing industry are becoming more diversified. The three major groups, local port groups, foreign companies, private companies, and even state-owned investment companies have stepped in relying on integrated operations, local resources, and capital advantages. The scale of oil depot construction has also increased. Large-scale, petroleum companies and private enterprises have been involved in the construction of crude oil commercial reserves, and specialized warehousing companies have expanded their networks. At the same time, due to tight land coastlines, the resource attributes of warehousing projects have become increasingly stronger, attracting more companies to enter. The market competition has become increasingly fierce.

Professional third-party petrochemical warehousing operators will become the mainstream of the industry, mainly including four categories. The first category is completely independent warehousing companies. Their core business is to build and operate terminals and warehousing facilities, and provide warehousing for external customers. Transit services. The second category is professional operators with "internal business". Warehousing is an independently operated business segment, but the parent company is engaged in petrochemical, transportation, port and other related businesses; the third category is large oil companies, which mainly provide services for their own refineries. It is equipped with supporting terminals and warehousing facilities, and occasionally provides external warehousing services. The fourth category is oil product trading companies, which invest in third-party warehousing facilities for their own trading activities.

Finally, there are logistics facilities. Traded crude oil and refined oil products need to be distributed through a complete logistics network, and the Asia-Pacific region is relatively weak in this regard.

Possible future development directions

1. Accelerate the construction of the crude oil futures market and increase the say in oil price pricing. In the long run, with the gradual improvement of my country's market economic system, the linkage between domestic and foreign oil markets will be significantly enhanced, and price risks will increase. Therefore, it is necessary to establish my country's oil trading market and increase the pricing power of the international oil market. 2. Increase the construction of oil reserves, establish and improve refined oil commercial reserves and emergency supply systems, and respond to the risk of international oil price fluctuations and the ability to cope with resource constraints.