China may overtake US to become largest oil importer before year-end

Dubai: Energy-hungry China is expected to overtake the US to become the world’s largest net oil importer before the end of this year, according to a report.

The report, quoting figures from the US Energy Information Administration (EIA), said that “the US is still the largest importer of oil, but not for much longer. While its net oil imports are quickly falling, those of China, the world’s second largest oil consumer, are quickly rising.”

Asian demand for Gulf Cooperation Council’s (GCC) energy products will remain robust as the regional industrial expansion continues in spite of the weak economic background, the report said.

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South Korea is an important economic partner to the Gulf, a certain level of competition exists among GCC countries to increase their share of exports, though, currently Saudi Arabia leads exports more than the rest of the Gulf to South Korea.

According to the report, China is not the only country heading that direction: India and newly industrialised economies like South Korea and Taiwan are also quickly catching up.

Just under half of the world’s top ten net oil importers come from emerging Asia, it said, revealing that South Korea is the 6th largest net oil importer.

Korea’s energy consumption levels have increased over time and, given that its production capacity is relatively low and rigid, its energy imports have been rising, said the report.

According to the report, the GCC exports nearly twice as much to emerging Asia than it does to the G3 nations comprising Colombia, Mexico, and Venezuela.

Less developed Asian economies, such as Vietnam and Cambodia, are also increasing their demand for the Gulf’s energy products, as they develop their industrial sectors, while the G3 is reducing its imports from the GCC, as their industries stall and as they become more energy self-sufficient.

Among the GCC countries, Saudi Arabia is the largest exporter to South Korea and fifth at the global level. Saudi shipped USD 37.5 billion worth of goods in the 12 months to July 2013, followed by Qatar with USD 26 billion, Kuwait with USD 18.4 billion and the UAE with USD 16.2 billion. Kuwait became South Korea’s third largest exporter from the GCC in 2011.

GCC comprises six gulf nations namely United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait.

PTI