The most overlooked oil production boom is in China
The boost in the country’s output, while auspicious for China, could cause collateral damage in the global oil market.
ASK anyone about China and the oil market, and the conversation will invariably focus on voracious consumption – and, perhaps more recently, the surge in electric-vehicle sales. Consistently overlooked is the country’s role as a major oil producer, but the latter matters now because, after a years-long lull, Chinese petroleum output is again booming.
Spending billions of dollars via its state-owned energy giants China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec) and Cnooc, Beijing has been able to reverse the decline in domestic oil production that started in 2015, lifting output this year to a near all-time high. In doing so, the country is somewhat damping the need to buy crude overseas, complicating the efforts of Saudi Arabia and its Opec+ allies to control the market.
On top of extra Chinese output, Opec+ is already battling higher-than-expected oil production from several of its own members that are under Western sanctions: Russia, Iran and Venezuela.
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