China's Crude Oil Buying Power Stabilizes Global Markets

Rosneft CEO Igor Sechin believes that China has taken the initiative from OPEC in stabilizing global oil markets, and is calling the shots instead. According to Sechin, China's crude oil buying behavior in the spring and summer has been crucial in keeping prices stable.

Sechin stated that China has strengthened its position as the ultimate swing buyer on the global market, and has successfully turned from a major consumer and importer into an active market leader. He noted that China took the initiative out from OPEC this year without joining any cartels, and managed to stabilize the global market by slashing its crude oil imports by about 5.5 million barrels per day.

Sechin pointed out that China's huge cushion of up to 1.4 billion barrels of crude in commercial and strategic stockpiles allowed it to slash imports when the Strait of Hormuz closed, and prices spiked. He added that China withdrew from the spot market amid the Middle East crisis, and by slashing import demand, Beijing single-handedly offset part of the lost supply.

The market appeared to have underestimated China's ability to be as flexible in its crude oil imports as to slash purchases by as much as 40% in June compared to pre-war levels. Sechin also noted that during the crisis, China saw soaring EV use, a massive switch to coal, and rising shares of power generation from renewable energy sources.