Sino-MENA: China energy mix spells change
During H1 of 2021, China’s oil imports reached a new first-half low since 2013. They declined to 10.5M bpd, a 3% YoY contraction compared with the same period in 2020. The key driver was a steep increase in oil prices, which in turn prompted China to defer purchases and dip into domestic inventories instead. We expect this downward consumption trend to continue (albeit not as sharply in the short-to-medium term) as Beijing significantly cuts import quota allocations.This week, we took a further step to discuss where the MENA region will be positioned as Beijing begins a new energy strategy to meet its carbon emissions target. We look at:
China’s new energy paradigm, which is bringing new market opportunities for MENA investors to explore.
Interest, mainly driven by Saudi Arabia and the UAE, in supporting China’s green pursuit.
How natural gas is set to play a strategic role, bringing resilience, security and stability to China’s energy mix during the green transition.
Florence Eid-Oakden, Ph.D, Chief Economist
Chen-Che Hsu, Analyst
The Regional Views series are thematic papers aimed at identifying and analysing factors behind medium to long-term economic trends shaping the region. Our analysis draws conclusions that help businesses and investors get ahead of the curve. As a firm staffed by Middle Easterners, we focus on insight rather than standard analysis.
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