Why China is important to us — OPEC

OPEC
OPEC [PHOTO CREDIT: Zero Hedge]

The Organization of Petroleum Exporting Countries (OPEC) on Monday said its alliance with the Peoples Republic of China was crucial for a stable global oil market.

At the end of the Third High-level meeting of the OPEC-China Energy Dialogue in Vienna, Austria, OPEC acknowledged China as the world’s largest importer of crude oil, acquiring the majority of its member countries’ oil.

“China is an essential trade partner for OPEC countries, the significance of which has grown greatly in recent decades, as well as being one of the largest and fastest-growing energy consumers,” the Secretary-General, International Energy Forum, Sun Xian Sheng, said in his opening remarks.

The meeting was co-chaired by the administrator of the National Energy Administration, People’s Republic of China, Zhang Jianhua, and OPEC Secretary-General, Mohammad Sanusi Barkindo.

Mr Sheng said the meeting was an excellent platform for knowledge exchange and the deepening relationship between China and OPEC in the interest of a stable oil market.

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He said with China’s growing capacity, as a leading consumer of crude oil, a strong collaboration with OPEC was essential for the interests of both, as well as the global economy.

A statement from the OPEC Secretariat said during the meeting discussions focused on topics intended to further advance relations between the two parties at both the high- and technical-levels.

In his contribution during the meeting, the Chinese administrator applauded OPEC’s ongoing efforts to stabilize the world oil market.

He said the OPEC dialogues with China and other countries will enhance both mutual understanding and global energy security.

Underlining the importance of continuing to discuss issues related to the global oil market and energy security in future, Mr Jianhua said the dialogue process provides solid groundwork for deepening cooperation between all parties.

For Mr Barkindo, as a leader in managing the energy transition and energy diversity, China will continue to play a critical role in overall future energy demand.

The OPEC Secretary-General emphasized the necessity for open, transparent and regular dialogue, and the pooling of collective expertise, to maintain sustainable stability in the oil market for the development of all economies.

Also, he expressed the hope that the important relationship that has developed through the OPEC-China Energy Dialogue process, which began in 2005, become deeper.

The meeting coming on the back of a technical meeting held between OPEC and the Chinese Academy of Social Sciences on October 11 this year in Vienna.

Discussions were held on the Charter of Cooperation, endorsed by 24 OPEC and non-OPEC producers at the most recent OPEC and non-OPEC Ministerial Meeting in July this year.

The meeting based on short-, medium- and long-term market developments and outlooks also looked at plans for future activities and the way forward.

During the meeting, China made presentations on the country’s oil and gas sector, particularly the strategic importance of OPEC, whose members account for more than half of the country’s total crude imports in 2018, in the crude oil import mix.

Besides, Chinese officials discussed developments related to the energy transition, including clean energy and the use of low-carbon fuels, as well as developments related to the Shanghai Future Exchange.

Further to the agreement from the Second High-Level Meeting of the OPEC-China Energy Dialogue in Beijing in December 2017, the parties resolved to strengthen their mutual cooperation.

They said they considered the cooperation necessary to improve timely and accurate communications; to aid in developing future outlooks of the oil market.

In addition, they said the cooperation will be required to overcome the myriad of growing market challenges and to examine technological developments and their implications.

“Our growing partnership represents a win-win situation not only for us, but for the entire oil market and world economy. I cannot emphasize enough the importance of our dialogue in shaping future decisions on production and investment,” the OPEC Secretary-General said.

The Fourth High-level Meeting of the OPEC-China Energy Dialogue is scheduled for Beijing in 2020.

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