China’s energy demand not to blame for higher oil prices, says Chinese official

Arguments that China’s soaring energy consumption is a factor behind crude oil prices rising to record highs are groundless, Foreign Minister Li Zhaoxing said March 6, adding that the stronger demand was being met by domestic production.

“Although China’s energy import has increased a little bit over the past two years, its imports only account for about 6 percent of the world’s total traded oil,” Li told a news conference during the annual meeting of China’s parliament.

Analysts often cite rising demand from China as one reason for the surge in crude oil prices last year. Prices peaked at US$55.67 a barrel in October. In New York, crude oil futures settled above US$53 in trading the week of Feb. 28.

China consumes about 2.45 million barrels of crude oil a day.

It ranks third behind the United States and Japan in crude oil imports, which rose 34.8 percent year-to-year to 122.72 million metric tons in 2004.

The booming economy’s surge in energy demand comes at a time when old oil fields in the country’s northeast are close to depletion and new fields are yet to come on line.

Li said it’s true that China’s energy demand has increased to a certain extent as the country’s economy has been growing rapidly in recent years. But he added that this increased demand is mainly being met domestically.

China also has a large potential for saving energy and improving efficiency, he said.

—The Associated Press