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China tops up its tanks amid escalating import dependence

China’s escalating dependence on oil imports has spurred the country to pursue an ambitious strategic stockpiling programme that is expected to be a feature of the global oil market throughout this decade

Energy security is driving Beijing’s strategy as it seeks to cushion the blow of potential supply disruptions from the major oil producing regions of the Middle East and Africa. Aside from supply-cut insurance, the strategic petroleum reserve (SPR), which is operated by the national oil companies, could also to a lesser extent be used unofficially for price smoothing, Kang Wu, a senior advisor to Facts Global Energy (FGE), told Petroleum Economist. The first phase of China’s SPR was run strictly as emergency storage, while the second phase is probably more flexible, says Kang. China’s SPR plan is broken into three phases with a total capacity target of around 500 million barrels. Hard info

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