Rosneft CEO: China Calls The Shots in Oil Markets, Not OPEC
China and its crude oil buying behavior in the spring and summer have stabilized global oil markets as Beijing, not OPEC, is calling the shots now, according to Igor Sechin, chief executive of Russia’s biggest oil producer Rosneft. China has strengthened its position of the ultimate swing buyer on the global market and has taken the initiative from OPEC, said the executive, who is considered to…
Igor Sechin, the CEO of Russia's largest oil producer Rosneft, has stated that China is the primary force dictating the global oil market, not OPEC. Sechin, a close ally of Russian President Vladimir Putin and a long-time critic of OPEC, made these remarks at an economic forum in Vladivostok, Russia's Far East. According to Sechin, China has transformed itself from a major oil consumer and importer to a market leader, taking control away from OPEC.
Sechin revealed that China successfully cut its crude oil imports by around 5.5 million barrels per day (bpd), significantly stabilizing the global market. This reduction was largely due to China's substantial crude oil reserves, which amounted to an estimated 1.4 billion barrels of commercial and strategic stockpiles before the Iran war. The massive stockpile enabled China to slash its imports when the Strait of Hormuz closed, and oil prices spiked.
Upon the Middle East crisis, China withdrew from the spot market and further reduced its crude oil imports by up to 40% compared to pre-war levels, thereby offsetting part of the lost supply. The market underestimated China's flexibility in adjusting its crude oil imports, cutting purchases by nearly half in June alone.
During the crisis, China experienced an increase in electric vehicle (EV) usage, a massive shift to coal, and a rise in renewable energy sources for power generation. Sechin believes that even greater growth in strategic and commercial reserves will further enhance China's influence in the energy market, especially as OPEC's membership dwindles.
In May, the United Arab Emirates (UAE), one of OPEC's largest producers, withdrew from the organization to prioritize its national interests.
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