According to US geospatial analytics company Orbital Insight, crude stockpiles of China could be comparable to the strategic oil reserves of the United States.
Orbital Insight assessed China’s oil inventories through satellite images and a special algorithm based on the roof shadows of oil tanks. The research revealed that China may stockpile way more crude oil than expected. The company logged 2,100 oil reservoirs in China, while TankTerminals.com, industry standard database, reports only 1,600 tanks. Besides, China could keep some stockpiles underground.
The company estimated China’s crude oil inventories in May 2016 at 600 million barrels, while the state-owned Xinhua news agency stated the country’s stockpiles made up 287 million barrels that are enough to cover 36 days of crude imports. The US commercial crude stocks could cover 150 days of the commodity imports.
The Energy Information Administration says that the US inventories totals 522.5 million barrels.
Analysts say that the Chinese inventories could affect the oil market situation significantly. The fact that China has bigger-than-expected crude stockpiles could mean that rising oil demand was linked to a well-thought-out plan instead of increasing consumption.
Such a scenario can hinder OPEC’s attempts to stabilize oil prices through a production cut and can help China create a buffer in case crude shipments suddenly stop.
