04 February 2011

China SignPost™ (洞察中国) # 21–Twilight in the Tundra: Russian and Kazakh oil production cannot keep up with China’s rising demand

Gabe Collins and Andrew Erickson, Twilight in the Tundra: Russian and Kazakh oil production cannot keep up with China’s rising demand,” China SignPost™ (洞察中国), No. 21 (4 February 2011).

China SignPost 洞察中国–“Clear, high-impact China analysis.”©

  • China’s oil demand growth each year is likely to exceed the delivery rate of the current Russia-to-China pipeline.
  • Oil production in Eastern Siberia will likely increase, but Moscow clearly wants to market this oil to a diverse customer base via seaborne sales from the port of Kozmino.
  • Despite oil pipeline projects such as the Skovorodino-to-Daqing line, China’s dependence on seaborne crude oil imports will rise.
  • China’s leaders are likely to remain preoccupied with maritime oil transport security.
  • China will continue to “free ride” on U.S. provision of sea lane security for now, but desire to achieve limited autonomous capabilities in this area could help to drive its future naval development.
  • The difficulty and undesirability of implementing a distant or close blockade of China’s seaborne oil supplies will continue to provide some protection for China, however.