Both the US and China import about half of their crude oil. For America the lion’s share comes from Canada and Mexico, as well as steadfast ally Saudi Arabia.
But China’s supply is more precarious, according to a new report from the Brookings Institution.
China is more dependent on Middle Eastern oil than the US. The protest movements in the Middle East leaves that supply in jeopardy. To solve that problem, they have been reaching out to oil producing countries in Africa, offering generous aid packages in exchange for easy access to oil fields.
Another place where the US is leading is in strategic petroleum reserves (SPRs). China laced these until 2004, when they started hoarding oil in four major sites. They are looking to increase their reserves from a paltry 103 million barrels to 281 million barrels by the end of this year. The US currently has 688 million barrels stocked, still barely enough.
Along with Russia and Canada, the Chinese are looking to take advantage of Arctic melting and try to secure rights to tap the Arctic sea for oil.
The Chinese might be buying more from Canada very soon. In a push to get the Obama administration’s approval for a pipeline from Alberta to the Gulf of Mexico, Canada’s Natural Resource Minister Joe Oliver threatened to court China as a potential customer if US environmentalists win out. Oliver told Bloomberg News, “We’ve got to go where the market is, and diversification of customers is a pretty fundamental economic construct.”