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China will surpass the United States as the biggest crude oil importer by 2017 as its economy continues to grow and as Chinese drivers push up demand for fuel, according to a report on Tuesday by global energy consultancy Wood Mackenzie.
According to the report, China will spend $500 billion annually on crude imports by 2020.
"The price China pays will far outstrip the peak cost ever incurred by the US of $335 billion annually with US import spend falling to only $160 billion annually by 2020," the report said.
From 2005 to 2020, China's oil imports will rise from 2.5 million barrels per day to 9.2 million barrels a day. US imports, on the other hand, will fall from a peak of 10.1 to 6.8 million barrels per day within the same period. That roughly represents a 360 percent increase in China's crude oil imports and a 32 percent decline for the US during that period.
As a result, the amount of oil from the Organization of the Petroleum Exporting Countries that China will import is expected to rise from 52 percent to 66 percent within that timeframe. Comparatively, for the US, OPEC crude will fall to 33 percent of US total imports, while Canadian crude will account for 60 percent of US imports.
The opposing trends will not only affect each country's energy costs, but also how each country trades across the globe, said William Durbin, Wood Mackenzie's Beijing-based president of global markets.
"By 2020, 70 percent of China's oil demand will come from imports. On the other hand, US import requirements will reduce due to tight oil production," Durbin said. "The US is becoming more North America-centric for its supply needs and China more dependent on Middle East and OPEC crude. We will therefore see OPEC suppliers, who traditionally focused on the US for crude sales, compelled to shift their focus toward China."
Wang Zhen, deputy head of the China University of Petroleum, said on Wednesday it was expected that China would become the biggest crude importer as its economy continues to grow and as the nation attempts to expand domestic oil supply.
Wang had previously said that China would become the world's largest crude importer by next year, but explained that the country's economic slowdown this year affected oil imports.
Earlier this month, the US Energy Information Administration predicted China would surpass the US as the world's biggest oil importer by October and would hold that position through 2014.
The Economics & Technology Research Institute of China National Petroleum Corp, China's top oil producer, said China's net crude imports this year will rise 7.3 percent from the previous year to 289 million metric tons. It also said that 58 percent of the nation's oil supply this year would be imported oil.
In 2012, China's net crude imports reached 269 million tons, according to data from the institute.
However, the essential issue here is not when China will surpass the US to become the largest crude importer, but how the nation will secure its energy supply, said Liao Na, vice-president of Shanghai-based energy consultancy ICIS-C1 Energy.