Number of days of supply of national petroleum stocks in China are said less than a month. It is far smaller than the United States or Japan. Is it true?
Chinese government has planned to increase its strategic petroleum reserve from the nearly zero level in early 2000s to 500 million barrels in 2020. However, China seems to have completed stockpiling only about 140 million barrels at moment.
Since average domestic petroleum consumption in the country was about 9.7 million barrels per day in 2012, the current strategic petroleum stocks are equivalent to 15 days of supply.
Member nations of the Organisation for Economic Cooperation and Development like the U.S. and Japan are required to secure more than 90 days of previous year's daily net imports of petroleum inventories. Calculation of days of supply is based on the net imports rather than consumption.
China is producing more than 4 million bpd of crude oil. The country's existing strategic petroleum stocks level can supply 25 days of net imports.
The strategic petroleum reserve of the U.S. only supply 37 days of consumption, and the Japanese national petroleum stocks can not supply more than 85 days of consumption. In Japan, private companies also have mandatory petroleum stockpile. The total of mandatory stockpile by the government and private sector could supply 153 days. Moreover, the total number of stockpiles including commercial inventories in Japan would reach supply of 200 days.
The SPR plus commercial petroleum stockpiles in the U.S. can supply 96 days of consumption and 230 days of net imports.
China also has commercial petroleum stockpiles in the private sector, but the actual numbers are not disclosed. Commercial petroleum inventories in October are estimated at about 310 million barrels based on calculation using various data. The stockpile level could supply 30 days of the country's consumption and provide 55 days of net imports.
Therefore, the total number of the national stockpile and commercial inventories in China reaches 80 days of net imports. The number is still much smaller than the U.S. or Japan, but seems not to be so unsafely.
However, about 90% of crude oil imports into China are currently carried by tankers. Land transportation from Russia or Kazakhstan are very limited. So China's petroleum import is likely to decline significantly in case of tensions in the adjacent waters.
China was originally planned to complete 300 million barrels of strategic petroleum stockpile by the end of 2013. But the schedule has delayed in step with the slowing down of the growth of the petroleum demand in the nation.
Currently, total 160 million barrels of national stockpile facilities are planned installing by the end of 2015, then another total 200 million barrels facilities will be built. However, further delay and changes might be seen.