June2023December2021TheoutlookforChina’sfossilfuelconsumptionundertheenergytransitionanditsgeopoliticalimplicationsOIESPAPER:CE8CHINAOIESPAPER:ET06CHINAMichalMeidan,HeadofChinaEnergyResearch,OIESAndersHove,ResearchAssociate,OIESThecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsmembers.Copyright©2023OxfordInstituteforEnergyStudies(RegisteredCharity,No.286084)Thispublicationmaybereproducedinpartforeducationalornon-profitpurposeswithoutspecialpermissionfromthecopyrightholder,providedacknowledgmentofthesourceismade.NouseofthispublicationmaybemadeforresaleorforanyothercommercialpurposewhatsoeverwithoutpriorpermissioninwritingfromtheOxfordInstituteforEnergyStudies.ISBN978-1-78467-209-6WithfundingsupportfromtheMinistryofDefence,UKThecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.iAcknowledgementsTheauthorthanksPhilipAndrews-Speed,BassamFattouhandJamesHendersonfortheircommentsandsuggestions.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.iiExecutivesummaryChinaiscurrentlytheworld’slargestoilimporterandisontracktobecomingthebiggestconsumerofliquefiednaturalgas(LNG).In2022thecountryreliedonimportsfor75percentofitsoilconsumption,and41percentofitsgassuppliesthatyearwerealsoimported.ThisdependencyisviewedbyBeijingasastrategicvulnerability,especiallyastieswiththeUSAareworseningandBeijinghasgrowingconcernsaboutWashington’suseofsanctions.TherearedifferentpathwaystoChinareachingnetzero,andmuchlikeforothercountries,thereisnosingleblueprint.Theenergymixwilldependoneconomicgrowthaswellasavarietyofpolicychoices.ButChinaiscommittedtopeakingcarbondioxideemissionsby2030andreachingcarbonneutralityby2050(knownasthedualcarbontargets).Coalconsumptionissettofalland,givenlimitedimportdependence,coalwillbecomeincreasinglyimmaterialfromageopoliticalperspective.Thatsaid,thespeedwithwhichChinawillphaseoutcoalisunclear,andwithabundantlocalreserves,coaloffersChinaflexibilityinitsenergysuppliesandasignificanthedgeagainstenergyinsecurity,evenasitsuseunderminesemissionreductiontargets.Despiterapidelectrificationtrends,mostscenariossuggestthatChinawillremaintheworld’slargestoilimportingcountryforthenexttwodecadesandasignificantgasimporter,althoughimportvolumesvaryconsiderablybyscenario.Giventhedominanceofcoal(andincreasinglyofrenewables)inthecountry’senergymix,andBeijing’seffortstostockpileoil,theeconomicimpactofoilandgassupplyoutagesislimitedandwilldeclinefurther.ButChina’ssenseofenergyinsecuritywillbeinformedasmuchbyBeijing’sperceptionsasbymarketrealities.ThenumberofoilandgassupplierstoChinaissettoshrink,withimportscomingpredominantlyfromtheUSA,Russia,andtheMiddleEast(andmostnotablySaudiArabiaforoil,andQatarforLNG).JustasChinawillbecomeincreasinglydependentonasmallnumberofexporters,theirinterdependencewilldeepen,leadingproducerstocompeteformarketshareinChina.Thedependenceonasmallernumberofsupplierscouldbeseenasavulnerability,butitalsogivesBeijinggeopoliticalleverage.OilandgashavebeencentraltorelationswiththeMiddleEast,butothercommercialinterestshavedevelopedovertime.Meanwhile,tieswithRussiaandtheUSAhavebeeninformedbynumerouspriorities,supplementedbyoilandgasneeds.Chinahasincorporateditsoilandgassecurityintoitsbroaderforeignpolicyobjectives.Butgiventheongoingneedforcriticalmaterialsandothercommodities(metalsandgrains,forinstance),Chinawilllikelyremaininvestedincountriesandregionsevenafteritsoilandgasimportsfromthemfall.China’senergysecuritypoliciesareincreasinglybeingshapedbytheprospectofsanctions.BeijingwillwanttodeepentiesandbuildcoalitionsaimedatweakeningtheUSA’sabilitytocontainandsupressChina.Beijingwillalsowanttoconsolidateitsrelationswithenergysuppliers(aswellassuppliersofotherrawmaterials)sothat,intheeventofsanctionsoraconflict,supplierswillstruggletopickbetweentheUSAandChina,orwillopttoalignwithChina.Beijingwillhaveagreatersayinglobalsecurityandtradingarchitecture.However,theextenttowhichChinawillwanttoactivelyengageinsecuringtradeflowsforthebenefitofotherAsianconsumersremainsanopenquestion.Chinawillalsowanttoshapeglobaltradingnormsanddynamicsthroughincreaseduseoftherenminbi(RMB).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.iiiContentsAcknowledgements.................................................................................................................................iiExecutivesummary................................................................................................................................iiiContents.................................................................................................................................................ivFiguresandTables................................................................................................................................ivIntroduction..............................................................................................................................................11.China’senergysystemisheavilydominatedbycoal—butthisisnotageopoliticalvulnerability...11.1CoalisstillkinginChina...............................................................................................................21.2China’senergytransitionandtheoutlookforcoal........................................................................32.Oilasasourceofvulnerability.........................................................................................................42.1Widevariationinoildemandoutlook,butChinaremainsthelargestconsumingandimportingcountry.................................................................................................................................................62.2Asmallerlistofsuppliers—vulnerabilityorleverage?..................................................................82.3Asignificantactorinoilproductmarkets......................................................................................93.Naturalgas—anuncertainbridgefuelforChina...........................................................................104.Geopoliticalimplications................................................................................................................144.1IntheMiddleEast,energysecurityisthecore,butotherinterestsarestillsignificant..............144.2Rethinkingnon-interference?......................................................................................................154.3ChinaandRussia—isenergyameansoranend?.....................................................................164.4ChinaandtheUSA—theelephantintheroom.........................................................................175.Beyondoilandgastrade...............................................................................................................19Conclusions...........................................................................................................................................20Bibliography..........................................................................................................................................21FiguresandTablesTable1:OiltradebyregioninIEAscenarios..........................................................................................7Figure1:China’spercentageenergymix,2022.....................................................................................2Figure2:China’scoalconsumption,exajoules.......................................................................................2Figure3:China’senergymixunderICCSDTsinghua’sfourpolicyscenarios.......................................3Figure4:China’soilimportsanddomesticproduction,mb/d.................................................................4Figure5:China’soilimportsbyregion,%oftotal...................................................................................5Figure6:China’soilimportsbytenmaincountries,md/d......................................................................6Figure7:China’soildemandscenarios..................................................................................................7Figure8:NetregionalcrudemovementsinShell’sSky2050scenario.................................................8Figure9:Oilandgastradevolumesviamajorchokepoints2018–2040,mboe/d..................................9Figure10:Chinagasconsumption,bcm..............................................................................................10Figure11:China’sgassupplies,bcm...................................................................................................11Figure12:China’sgasimportsbycountry,bcm...................................................................................11Figure13:Gasconsumptionbysector,bcm........................................................................................12Figure14:EstimatesofChina’sfuturegasdemand,Bcm....................................................................13Figure15:Changeinnaturalgasnettradeinselectedregions...........................................................13Figure16:ChinaLNGimportcontractsbycountry,Bcm.....................................................................14Figure17:China’scrudeimportsfromtheUS,thousandb/d...............................................................17Figure18:China’sLNGimportsfromtheUSA,Qatar,andRussia,Bcm............................................18Figure19:ChineseLNGSalesandPurchaseAgreements(SPAs)signedin2021–2022bycountry(percent)......................................................................................................................................................18Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.ivIntroductionChinaiscurrentlytheworld’slargestoilimporterandisontracktobecomingthebiggestconsumerofliquefiednaturalgas(LNG).ThisdependencyisviewedinBeijingasastrategicvulnerability,especiallyasChina’stieswiththeUSAareworseningandBeijinghasgrowingconcernsaboutWashington’suseofsanctions.ThispaperassesseshowChina’spursuitofitslowcarbonenergytransitionwillalteritsoilandgasconsumptionandchangeitsgeopoliticalrelationswithproducercountries.Thispaperaimstofillagapindiscussionsonthegeopoliticsoftheenergytransitionandhowshiftsinoilandgasconsumptioncouldimpactinternationalrelations.GivenChina’simportanceinglobaloilandgasmarkets,unpackingfutureenergydemandtrendsandthepotentialshiftsintradeflows,combinedwithabriefoverviewofChina’soilandgassecuritypoliciestodate,isintendedtoinformrationalconversationsaboutfuturetrends.ItisalsousefultoassesshowChinathinksaboutresourcesecurityandforeignpolicyasaprecursortothinkingaboutthegeopoliticalimplicationsofChina’squestforcriticalmaterialsaroundtheworld.ThispaperbeginsbylookingatsomeofthedifferentpathwaystoChinareachingnetzero.ItthendiscussesChina’soilconsumptionandimportstodate,aswellasdifferentoutlooksforoildemand.Sectionthreethenanalysesgasdemandbysector,importsourcesandfuturetrendsbeforelookingatregionalenergyrelations.SectionfourdiscussesChina’senergyrelationswiththeMiddleEast,RussiaandtheUS.Finally,thepaperarguesthatChina’senergysecuritypoliciesareincreasinglybeingshapedbytheprospectofsanctions.BeijingwillwanttodeepentiesandbuildcoalitionsaimedatweakeningtheUSA’sabilitytocontainandsuppressChina.Beijingwillalsowanttoconsolidateitsrelationswithenergysuppliers(aswellassuppliersofotherrawmaterials)sothat,intheeventofsanctionsoraconflict,supplierswillstruggletopickbetweentheUSAandChina,orwillopttoalignwithChina.1.China’senergysystemisheavilydominatedbycoal—butthisisnotageopoliticalvulnerabilityChina’srapideconomicgrowthhasledtoasurgeinenergydemand.Primaryenergyconsumptionincreasedfrom1.5billiontonsofstandardcoalin2000to5.4billiontonsstandardcoalin2022,accordingtoChina’sNationalBureauofStatistics,accountingfor26.5percentofglobalprimaryenergyconsumption1.Since2005,Chinahasalsobeenthebiggestemitterofenergy-relatedCO₂emissions2.Moreover,despiteimpressivegrowthinrenewablessince2000,fossilfuelsstillaccountedfor83percentofChina’sprimaryenergymixin2022,withcoalaccountingfor56percentandoil18percent.Naturalgasaccountedforanadditional9percent(Figure1)3.Forcomparison,in2021theUKreliedonfossilfuelsfor76percentofitsprimaryenergyconsumption,butcoalaccountedfor3percent,withnaturalgasandoileachrepresenting38and35percent,respectively4.Fossilfuelsareprevalentinmanycountries’energysupplystructures,butChinaisheavilydependentoncoal—afactorthatcontributestothecountry’slargeemissionsprofile,butalsoenhancesitsenergyindependence.1Itisimportanttonotethatthroughoutthe1980sand1990s,despitestrongeconomicgrowthinChina,theavailabilityofenergy-efficienttechnologiesledtoadramaticimprovementinthecountry’senergyintensity(energyconsumptionperunitofGDP).Primaryenergydemandroseonaveragebymorethan8percentayearbetween2000and2010,slowingto3.4percentinthefiveyearsto2015,andjustover3percentover2015–2020(IEA,2021).2IEA(2021).3NationalBureauofStatisticsofChina(2023).4BasedonBP(2022).Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews1oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.Figure1:China’spercentageenergymix,2022OilRenewables18%7%NaturalGasHydro9%8%Nuclear2%Coal56%Source:NationalBureauofStatisticsofChina(2023)1.1CoalisstillkinginChinaChinaistheworld’slargestconsumerandproducerofcoal.CoalisusedinChinapredominantlyforelectricityandheatgeneration,accountingfor60percentoftotalcoaluse,andindustryrepresentinganadditional33percentin20205.Withlargedomesticreserves,Chinahasbeenabletolimititsdependenceonimportedcoaltoaround10percentoftotalsupplies.Withgrowingeffortstotacklelocalairpollutionandrebalancethecountry’seconomicstructuretowardamoreconsumption-leddevelopmentmodel,coalconsumptiondeclinedin2015and2016.Butsince2017,Chinesecoalconsumptionhasbeenrisingagainasenergy-intensivemanufacturingsectorsreboundedandheavyconstructionactivitygrew.InthewakeoftheCOVID-19pandemic,China’seconomicexpansionandsubtleshiftsingovernmentpolicy,givenrenewedconcernsaboutenergysecurity(bothdomesticandinternationalaspects)6,haveledtoasurgeincoalconsumption(Figure2).Figure2:China’scoalconsumption,exajoulesSource:BP2023,OIES(2022dataisanestimate)5Buildings,agriculture,andnon-energyuseaccountfortherestofcoaldemand,accordingtoIEA(2021,23).6Andrews-SpeedandMeidan(2022).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.2Overtime,however,growingpressuretophaseoutcoal,asarticulatedinChina’sdualcarbonpledgetopeakCO₂emissionsbefore2030andreachnetzeroby2060,meansthatChinawillcapcoalcapacityadditionsandgraduallyphasedowncoaluse.Structuralchangestotheeconomyandtherapidadditionofrenewableenergysourceswillhelppromotethisshift.Thatsaid,eventhoughChinaiscommittedtotheenergytransition,therearevariouspathwaystonetzero,anditremainstobeseenhowquicklyChinawillreduceitscoalconsumption(andwhetheritwillscaleupcarboncapture,utilization,andstoragetechnologiesquicklyenough).Notwithstandingitsenvironmentalcommitments,China’sabundantdomesticcoalreservesprovideasignificanthedgeagainstenergyinsecurity.China’srelianceonimportedcoalislikelytoremainlimitedandeventofallconsiderably.Astheshareofcoalimportsisalreadylimitedandwillgraduallydecline,thispaperdoesnotdiscusstheoutlookforcoalimportsortheirgeopoliticalimplications,butratherfocusesonoilandgasdemandandimports.CoalisthereforenotageopoliticalvulnerabilityforChina.Onthecontrary,itoffersChinaoptionalityandsupplysecurity,eventhoughthiscomesatanenvironmentalcost.1.2China’senergytransitionandtheoutlookforcoalInrecognitionoftherisingenvironmentalcostofcoal,amongotherreasons,inSeptember2020PresidentXiJinpingpledgedthatthecountrywouldpeakCO₂emissionsbefore2030andreachcarbonneutralityby2060.TherearevariousroadmapsandscenariostoChina’scarbonneutrality7;asformanyothercountries,thereisnosingleblueprintonhowtoreachthenetzerogoal8.ThepathwaysdevelopedbyTsinghuaUniversity’sInstituteofClimateChangeandSustainableDevelopment(ICCSD)areinterestingtoconsiderinthiscontext.TheyarecreditedwithhavinginformedpresidentXi’spledge9,andsincetheywerepublishedshortlyaftertheannouncementinSeptember2020,theyhavebeeninfluentialinpolicydiscussioninChina.TheTsinghuascenarios(Figure3)arebynomeansablueprintforChinabuttheyareusefulinprovidingapoliticallypalatablerangeofscenarios.GiventhatChina’sbiggestchallengeisphasingoutcoal,keyissuesintheTsinghuascenariosandmanyotheroutlooksarehowrapidlywindandsolarcanreplacecoal,andtherolethatnuclear,andtoalesserextenthydro,willplayinthattransition.AccordingtotheICCSDTsinghuastudy,in2030coalwillaccountforanywherebetween48and35percentoftheenergymix(dependingonthescenario)andby2050,between35and5percent.Figure3:China’senergymixunderICCSDTsinghua’sfourpolicyscenariosSource:ICCSDTsinghua(2022)7SeeforinstanceIEA(2021);CET(2022);ICCSDTsinghua(2022);IRENA(2022).8Meidan(2020a).9BloombergNews(2020).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.32.OilasasourceofvulnerabilityChina’soildemandhasincreasedalmosttenfoldbetween1980and2020,andhasaccountedfor40percentofglobaloildemandgrowthsince2000.Around60percentofoilinChinaisconsumedintransportation,followedbypetrochemicalfeedstockandotherindustrywith16percent,whilebuildingsaccountfor8percentofoiluse.Theshareofoilusedinelectricityisminimal(ataround1percent).Globally,countriesuseonaverage55percentoftheiroilintransport,withpetrochemicalsandotherindustryaccountingfor18percent,andpowerfor6percent.TherapidincreaseinoiluseinChinaisrelatedtothecountry’seconomicdevelopment,itsurbanization,andtheincreaseddemandfortransportincars,planes,andtrucks.ButtheshareofoilinChina’senergymix,at18percent,islowcomparedtotheglobalaverageof34percent.Thisisinpartbecausetherearefewerthan200vehiclesper1000peopleinChina,comparedtomorethan800vehiclesintheUSA,and400–600vehiclesinEurope.Atthesametime,China’srailnetworks(whichareelectric)areusedforfreight,therebylimitingincrementaloildemand.Similarly,eventhoughoilisusedtoproducepetrochemicals,inChinamethanolandcoalarealsousedasabasicfeedstock,whichdisplacessomeoildemand.Despitethis,China’soilusehasgrownrapidly,presentingthecountrywithtwomainchallenges.First,accordingtotheInternationalEnergyAgency(IEA),in2019oilcombustioncontributed15percentofthecountry’scarbondioxideemissionsfromenergy,upfrom13percentin2010.Oilextractionalsocontributestowaterpollutionandwaterresourcedepletion10.Second,eventhoughChina’sdomesticproductionisroughlyequivalenttoIraq’soutput,hoveringcurrentlyataround4millionbarrelsperday(mb/d),demandhasvastlyoutpaceddomesticsupplies,leadingtolargeimportsandconcernsaboutenergysecurity.China’scrudeimportsaveragedover10mb/dsince2019,roughlyequivalenttoRussianorSauditotalcrudeproduction(Figure4)Figure4:China’soilimportsanddomesticproduction,mb/dSource:ChinaCustomsdata,NationalBureauofStatisticsofChinaOvertheyears,theChinesegovernmenthassoughttomitigatethevulnerabilitiesassociatedwithimportedoil:theseincludetheimpactofhighoilpricesontheChineseeconomy;supplyoutagescausedbypoliticalinstabilityorinfrastructureattacksinitsmajorsupplierstatesorinmaritimechokepoints;anddeliberateembargoesorsanctionsbytheUSA(forexampleonIran,Venezuela,andRussia)11.Responsestotheseconcernshavebeenmultifaceted.Onthedemandside,Beijinghaslookedtoincreaseenergyefficiencyaswellasvehicleefficiency,introducedandencouragedtheuseofpublictransport,andpromotedelectrificationofthevehiclefleet.Onthesupplyside,ithasaimedtosupportdomesticproduction,diversifyimportsources,andbuildstrategicreserves,inlinewiththeIEA’sguidanceforcountriestohold90daysofforwardcover12.10NRDC(2019).11Meierding(2022);Meidan(2019).12NRDC(2019,36);IEA(2000);Downs(2004).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.4AspartofChina’squestforenergysecurity,Chinesecompanieshaveinvestedoverseasinupstreamassets,whiletheChinesegovernmenthasofferedproducercountriesloansthattheyhaverepaidwithoil.China’stradershavebecomemoreactiveininternationalmarkets,optimizingflowsandminimizingpricerisk.AndinanefforttoenhanceChina’sglobalpricingpower,thegovernmenthaslaunchedacrudebenchmarkintheChinesecurrency,therenminbi(RMB).Morerecently,ChinesecompanieshavesoughttousetheChinesecurrencyintrading13.Finally,BeijinghaslookedtonationalizeitssupplychainsbyrelyingincreasinglyonChinesetraders,merchantfleets,andinsurancecompanies14.Oilconsumptionhascontinuedgrowingatarapidpacedespitedemand-sidemeasures.Importsaccountedfor75percentofthecountry’stotaloilsuppliesin2022.Chinasourcesitscrudefromover40countriesandhasmanagedtocaptheshareofMiddleEasternsuppliesataround50percentorlessofitstotalimports(Figure5).Yeteventhoughnosinglesupplieraccountsformorethan20percentofChina’soilimports,itstopfivesuppliers—Russia,SaudiArabia,Iraq,Oman,andtheUnitedArabEmirates(UAE)—accountforclosetotwo-thirdsofChina’simports.FourofthesefivearelocatedintheMiddleEast(Figure6).Thatsaid,whenlookingatChina’soilsupplies,officialstatisticstellonlypartofthestory.Chineserefinershaveaccesstosanctionedcrudes(fromIran,Venezuela,andRussia)whichareusuallyofferedatadiscountasproducerscompetetosupplyChina.Chinahasthereforecreated(withthehelpofsellersattimes)theinfrastructuretocontinuetoimportfromsanctionedcountries.Figure5:China’soilimportsbyregion,%oftotalSource:ChinaCustomsChinahasalsosecuredoverlandoilsuppliesthroughpipelinesfromRussiaandCentralAsia(Kazakhstan)inabidtolimititsrelianceonseaborneflowsandthechokepointsinboththeHormuzandMalaccaStraits.Butpipelinesaccountforunder10percentofimports,leavingChina’soilflowsoverwhelminglyseaborne.ChinaisalsodiversifyingitsmaritimeenergytransitroutesthroughtheNorthernSeaRoutealongRussia’sArcticcoast.Byusingthisroute,tankerscantravelfromexportterminalsinMurmanskandtheYamalPeninsulatoChina’sPacificportswithoutpassingthroughmaritimechokepoints,includingtheSuezCanal,Babal-Mandab,andStraitofMalacca.Theroutealsocutsshippingtimesnearlyinhalf15.TheNorthernSeaRouteisanappealingprospectforLNGexportsfromRussiatoChina,butitsuseisstillconstrainedbyicyconditionsandhighdeliverycosts.OilflowsviatheNorthernSeaRoutearealsostilllimited16.13Gnana(2022).14EricksonandCollins(2007).15Meierding(2022).16YermakovandYermakova(2021).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.5Figure6:China’soilimportsbytenmaincountries,mb/dNote:CustomsdatalikelyunderstateflowsfromIranandVenezuelasince2020,andlikelyunderstateRussianimportssince2022,assanctionshaveledtothemisreportingofcertaincrudes.Source:ChinaCustoms2.1Widevariationinoildemandoutlook,butChinaremainsthelargestconsumingandimportingcountryThedifferenttrajectoriesforoildemanddependbothonmacroeconomicfactors—thebroadereconomicstructurethatdeterminesdemandforindustrialfuelsandincomegrowth,impactingabilitytotravelandpurchaseconsumergoods17—andonsector-specificpolicies.Thepenetrationofelectricvehiclesisparticularlysignificant,giventhatitwilldeterminehowquicklyinternalcombustionengines(whichconsumegasoline,accountingforaroundone-fifthofChina’soildemand18)willbephasedout.Equally,theextenttowhichgovernmentpoliciessupportamoveawayfromroadfreighttorail(whichiselectric)orwater-basedtransport19,aswellasinnovationinfuelcellvehiclesorelectrificationofheavydutytrucking,willimpactdieseldemand.Similarly,differentfeedstocksforpetrochemicalsandincreasesinmaterialrecyclingwillalsodeterminethevolumeatwhichoildemandpeaksandhowquicklyitsusedeclines20.Forinstance,China’slargeststate-ownedoilandgascompany,theChinaNationalPetroleumCorporation(CNPC),expectstransportdemandtopeakin2026–2027,butchemicalsuseandaviationdemandtocontinuegrowingintothe2030s.Theseissuesarealreadythesubjectofresearchandmeritfurtheranalysis,butthisisbeyondthescopeofthispaper.Notwithstandingthesepolicychoices,differentscenariosdevelopedbyTsinghua’sICCSD,CNPC,andIEAmostlypredictthatChina’soildemandwillkeepgrowingoverthenextdecade,withconsumptionrangingbetween14and17mb/d(someseeadeclinefromthecurrent15mb/din2021).Themoreambitiousemissionsreductionpathwaysthenleadtodemandfallingtoaround10mb/din2040and6mb/dby2050(Figure7).Bythen,therangeofoutcomesiswider,withthehigherdemandestimatesstillexpectingaround12mb/dofoiluseinChina.Inshort,whilemostestimatesagreethatChina’soildemandremainsflatorrisesmarginallyoverthecomingdecade,between2030and2050itcoulddeclinebyaslittleas2mb/dorasmuchas10mb/d.17ForfurtherdiscussiononthisseeMeidanetal.(2015);Meidan(2020b).18Senetal.(2017);Guoetal.(2023).19ZhenyingShaoetal.(2022);Khannaetal.(2021).20SeealsoIEA(2022a,7).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.6Figure7:China’soildemandscenariosNote:TwoICCSDTsinghuascenarios;twoscenariosfromCNPC,China’slargestoilandgascompany;andtheIEA’sstatedpoliciesscenario(STEPS)andannouncedpledgesscenario(APS).Source:ICCSDTsinghua(2022),CNPCETRIWorldEnergyOutlook2060,2022edition;IEA(2022b)ThesedifferentdemandscenariosalsoimpactChina’simportprofilebut,assumingthatChina’sdomesticoilproductionfallsovertheperiodto2050aswell,evenatthelowerendofitsdemandneeds,Chinawillremainanoilimporter.AccordingtotheIEAWorldEnergyOutlook202221,inallscenariosChinawillbetheworld’slargestconsumingandimportingcountry(Table1).Table1:OiltradebyregioninIEAscenariosSource:IEA(2022b)Shell’sSky2050,whichworksbackfromagoalofreachingnetzeroby2050andglobalwarminglimitedto1.5°Cbytheendofthecentury,seesChinabecominganetcrudeoilexporterin205022(Figure8).Buteventhen,foranothertwodecadesorsoChinaisstillacriticalconsumerandimporterofoil.21IEA(2022b,341).22Shell(2023,38).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.7Figure8:NetregionalcrudemovementsinShell’sSky2050scenarioSource:Shell(2023)232.2Asmallerlistofsuppliers—vulnerabilityorleverage?Intermsofsuppliers,manyscenarios24expecttheMiddleEast’sandUSA’sshareofglobalexportstorise.OutflowsfromBrazilcouldgrow,whileotherCentralandSouthAmericansuppliersseetheirexportsdiminish.ExportsfromAfricaareprojectedtofallasproducercountriesconsumetheiroutputdomestically.Russianproductionandexportsarealsowidelyexpectedtostagnateandthenfall.Inshort,whileChina’sfutureoilneedsvarywidelyunderdifferentscenarios,itremainsthelargestoil-consumingand-importingcountrythrough2050.Thewayitviewsandchoosestomanagethevulnerabilitiesassociatedwiththatdependencyisdiscussedbelow,giventhatthiswillbeinformedbyanumberofdomesticandinternationalfactors.NotwithstandingthesizeofChina’simportneeds,itsoilimportswillbecloselylinkedtotheMiddleEastandtheUSA,suggestingthatthemaritimechokepointsofHormuzandMalaccawillremainsignificant(Figure9).Chinaisalreadydevelopingnavalcapabilitiesandapresenceinglobalports.Itisalsobuildingamerchantfleet25tomitigatevulnerabilitiesassociatedwithUSfinancialsanctions.Atthesametime,asChina’scloutinglobalgovernanceandenergytradinggrows,andgiventheimportanceoftradefromtheMiddleEasttoAsia,itremainstobeseenwhetherChinawillwanttoactasasecurityproviderforglobalshippingroutes.Thiswillalsobetrueforothercommodities,notjustoilandgas,asChinawilllikelyremaindependentoncriticalmaterialsfromavarietyofcountries.Moreover,ifChinadoesopttotakeamoreactivestanceinsecuringmaritimeflows,willitchoosetodosowithinthecontextofexistingmultilateralinstitutions,bilaterallywithothernavalpowers,orunilaterally?23Shell(2023).24ThisisalsotheviewinBP(2023,45)andShell(2023,38).25EricksonandCollins(2007);alsoseeCollinsetal.(eds)2008.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.8Figure9:Oilandgastradevolumesviamajorchokepoints2018–2040,mboe/dSource:IEA(2022c)2.3AsignificantactorinoilproductmarketsWhileChinaremainsvulnerabletocrudeoilsupplyshocks,ithasbuiltupalargedownstreamcapacity,renderingitvirtuallyself-sufficientforoilproducts.WhileChinadoesimportsomeoilproducts,itmainlyrequiresimportedpetrochemicalfeedstocks(naphtha,LPG,ethane).ItsdomesticrefiningcapacitytodayissecondonlytothatoftheUSA,andasthecountrycontinuestoaddnewrefineries,itisfacingasurplusofoilproductsandpotentiallypetrochemicals.Asaresult,Chinawillremainanimportantplayerinrefinedoilproductmarkets.MostscenariosforecastthatChinawillremaintheworld’ssecondlargestrefiner.Beijing’scurrentpoliciesincludeeffortstolimitnewrefiningadditionsandgraduallyreduceproductexports,focusinginsteadonchemicalandpetrochemicalproductiontomeetdomesticneeds.ButifChinareversescurrentpoliciesandcontinues,orevenincreases,itsexportsofoilproductsand/orchemicals,itwillenterintodirectcompetitionwithSaudiArabia,whichisgrowingitsglobalexportsofproductsandchemicals,aswellaswithIndia,anotherlargeregionalrefiner.AndasAfricancountriesareexpectedtoconsumemoreoilproducts,Chineseexportscouldbeshippedfurtherafieldthantheircurrentexportmarkets,whichconsistmainlyofAsianbuyers.IfChinadoesemergeasacrudeoilorproductandchemicalsexporter,itwillbebothalargeimporterofcrudeoilandanexporterofproductsandpetrochemicalstonewmarkets.Thedirectioninwhichoilandoilproductswillflowcouldthereforechange,aswillitsexposuretoglobaloilandproductmarkets.Evenasoiltraderouteschange,however,China’sneedforcriticalmaterialsandfoodandgrainimportsmeanthatitwillstillrelyonmaritimetraderoutes26,andconcernsaboutmaritimesecurityareunlikelytofadeaway.Asitspowerandglobalpresencegrows,China’sperceptionofitsvulnerabilitywillevolve.FollowingtheRussianinvasionofUkraineandtheensuingsanctions—andafterhavinghadtorespondtofinancialsectionsontradewithIranandVenezuela—Beijingislookingtomitigatethepotentialimpactofsanctionsthroughavarietyofmarketanddiplomaticmeasures.YetitisunclearhoweffectiveChina’seffortstosanction-proofitseconomywillbe,andwhethertheywillmitigateitssenseofvulnerability.26Thisassumesthatcurrentpoliciesandtrajectoriesaremaintained.ThispaperdoesnotconsidertheimplicationsofasharpdecelerationineconomicactivityinChina,orapolitical/economicdisaster.NordoesitconsidertheimplicationsofChinabecomingself-sufficientforenergyandgrains.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.9Beijing’sassessmentofitsstrategicvulnerabilitieswilldependasmuchonperceptionsinBeijingasitwillonmarketrealities.Chinahasalreadybuiltupconsiderableforwardcoverforcrude27:ithastheabilitytorationsuppliesdomesticallyintheeventofanoutageandtosubstitutefuels,suggestingthatintheeventofasupplyoutage(orevenasharppricespike),Beijinghastoolstoblunttheeconomicimpact28.AprotractedoilsupplyoutagewouldnegativelyimpacttheChineseeconomy,butitwouldbeunlikelytocrippleit.3.Naturalgas—anuncertainbridgefuelforChinaGasisthefastest-growingfossilfuelinChina,asitisconsideredacleanfuelandverymuchpartofthecountry’senergytransitionawayfromcoal(Figure10).InmanymembercountriesoftheOrganisationforEconomicCo-operationandDevelopment(OECD),gasaccountsforroughlyonequarteroftheenergymixandisusedpredominantlyinpowerandindustry.InChina,gasaccountedfor9percentofthemixin2022andisusedpredominantlyintheindustrialandcommercialsectors.AccordingtotheNationalEnergyAdministration,in2020industrialdemandaccountedfor37percentoftotalgasuse,whilepowergenerationconsumedanadditional16percentandthechemicalindustry9percent29.Figure10:Chinagasconsumption,bcmSource:NationalBureauofStatistics,ChinaCustoms,NDRC,OIESWhileChinaisalsotheworld’sfourthlargestgasproducer,domesticsupplygrowthhasfailedtokeepupwithincreaseddemand,leadingtorisingimports.In2022,importsaccountedfor41percentofChina’stotalgasuse.TheChinesegovernmenthassoughttomaintainandexpanddomesticupstreamproductioninabidtolimitthecountry’simportdependency30,andhasmadeeffortstodevelopoverlandpipelinesupplyroutesaswellastoattractflowsofLNG.Upuntil2017,LNGandpipelinegasflowsintoChinawereroughlyeven(Figure11).Thecoal-to-gasswitchin2017–2018ledtoarapidincreaseinLNGimportstosatisfytheshort-termdemandspike.Moreover,thegovernment’seffortstoopenthegassectortonon-stateactors31havealsoledtoariseinLNGimportsfromnewbuyers,tiltingthebalanceinfavourofLNG.ButthePowerofSiberiagaspipelinefromRussiathatstartedupin2019andissettosupplyChinawith38Bcmain2025–2026,isgraduallyrebalancingtheshareofpipelinesintotalinflows.27Meidan(2021).28Collins(2018).29NationalEnergyAdministration(2021).30SeeZheRuan(2020).31BouteandFang(2022);DownsandYan(2020).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.10Figure11:China’sgassupplies,bcmSource:ChinaCustoms,NBS,OIESGassuppliestoChinaareconcentratedfromasmallnumberofsuppliers(Figure12),predominantlyinAsia(forLNGsupplies)andCentralAsia,fromwhichmostofChina’spipelineflowsaresourced.Figure12:China’sgasimportsbycountry,bcmNote:IncludesbothpipelineandLNGimports;datafor2022aremissingasChinaCustomsstoppedreportingpipelineflowsbycountry.Source:ChinaCustomsAsBeijinglookstophaseoutcoaluse,theneedforgasinChinawillincrease.Butthesizeandspeedoffuelswitchingtogasisextremelyuncertain,andwilldependonanumberoffactors:first,theextenttowhichcoalremainspartoftheenergymixwithcarboncapture,use,andstorage(CCUS)technologiesthatwouldoffsetemissions32;second,thespeedwithwhichrenewablesaredeployed,mainlyinthepowersector;andthird,theavailabilityandcost-competitivenessofgas.Inits13thFive-YearPlan(2016–2020),China’sgovernmentpromotedcoal-to-gasswitchinginindustrialandresidentialuseasameansofphasingoutdispersedcoal.Thisledtoasharpincreaseingasuse.Iffuelswitchingisencouraged,residentialandindustrialgasdemandisexpectedtocontinue32CCUScanbeusedinconjunctionwithnaturalgastoo,allowingittoplayagreaterroleinnetzeropathways,butsincecoal-basedsolutionsarelikelytoremaincheaperthannaturalgas,thedeploymentofCCUSisexpectedtobemoresignificantforcoal.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.11growinginthefutureasmorecoalisphasedout(seeFigure13forcurrentusebysector).Gasislikelytoplayalargerroleasabalancingfueltohelpdealwiththeintermittencyofrenewables33,buttheextentofthedemandincreasewilldependontheuseofcoaltobackupintermittentrenewables,whichtheChinesegovernmentisnowfavouring,aswellasprovincialpoliciestousegasforsystemflexibility.Goingforward,naturalgascouldalsobeusedincementproduction,andasaninputtohydrogenproduction(mostlywithCCUS)34.Thespeedoftheswitchtogasalsodependsonsuppliesandcost:thegovernment’s2023WorkReport,forinstance,calledto‘strictlycontrol’coal-to-gasswitchingduetoconcernsaboutsupplysecurity,butitisunclearwhetherfuelswitchingwillbeencouragedagainif/whengaspricesfallorsuppliesaredeemedmoresecure35.Figure13:Gasconsumptionbysector,bcmSource:NationalBureauofStatisticsofChina,OIESNotwithstandingtheseuncertainties,inmanydifferentscenarios36China’sgasdemandrisesoverthenextdecade,from366Bcmin2022tobetween550and620Bcmin2030(Figure14)andpeakingin2040,albeitatdifferentlevels.By2050,however,thedifferencebetweenvariousscenariosisroughly300Bcm.Inallofthesescenarios,theshareofgasinChina’senergymixisunlikelytoexceed15percent.TheIEA’slatestWorldEnergyOutlookisexceptionallyconservativeregardingChina’sfuturegasdemand,estimatingthatitpeaksataround440Bcmin203037.Atthesametime,sincedomesticproductioninChinaisexpectedtopeakataround300Bcminthemid-2030s,Chinawillbecomeincreasinglydependentonimportsbetweennowand2050.MostoftheincreaseinLNGimportsisexpectedtocomefromtheUSAandQatar.Meanwhile,AustralianLNGoutflowsarealsoexpectedtodeclinepost-2030.RussianLNGexportsuntil2030areexpectedtobeconstrainedbyrestrictionsonRussia’saccesstoWesterntechnologyandfunding38.WhilelimitsonnewLNGprojectsinRussiawillalsoimpactthevolumesavailabletoChina,ChinastillstandstobenefitfromRussia’sgrowingisolation.ChinesecompaniescouldgainnewcontractsintheRussianenergysectorandwillcontinueimportingavailableRussianLNG(Figure15).33SeeYanQin(2020).34IEA(2022a).35NDRC(2023,66).36IncludingCNPCandETRI(2022);ICCSDTsinghua(2022);IEA(2022a);Fulwood(2021).37IEA(2022b,372).38BP(2023,53).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.12Figure14:EstimatesofChina’sfuturegasdemand,BcmSource:CNPCETRI(2022);ICCSDTsinghua(2022);StateGridEnergyResearchInstitute;OIESresearchFigure15:ChangeinnaturalgasnettradeinselectedregionsintheIEASTEPSandAPSscenariosSource:IEA(2022b)DespiteChina’sdesiretodiversifyimportsources,basedontheoutlookforfutureglobaloutputandChina’scurrentcontractualengagements,itwillrelyonasmallnumberofgasexporters:itsLNGsupplieswillcomepredominantlyfromAustralia,Qatar,theUSA,andRussia(Figure16).ChinaandRussiaarealsonegotiatinganadditionalpipelinedeal(PowerofSiberia2)which,ifconcluded,willmeanthatpipelineflowswillbedominatedbyRussiaalongsideTurkmenistan.IfthePowerofSiberia2dealisagreedbetweenChinaandRussia,pipelineimportsalonefromRussiawillexceed100Bcminthe2030s.Dependingonthedemandoutlook—andthevolumeofLNGflowingfromRussiatoChina—Russiawouldaccountforroughlyone-thirdofChina’stotalimports.Atthesametime,failuretoreachapipelinesupplydealwouldlikelymeanhigherdependenceonLNG,which,giventheexportingcountries,maynotbeidealforChinafromageopoliticalperspective.Thatsaid,geopoliticsisnotthesolefactordeterminingChinesecompanies’supplydeals.Eventhoughtheyareclearlyawareandmindfulofgovernmentgoalsandstrategies—andoftheriskofsanctions—theircontractsareinformedbycommercialconsiderations.Forinstance,overthecourseof2021and2022,Chinesebuyerssignedover20mtofnewLNGsupplycontractswithUSsellers.SincemanyofthesecontractsarereportedlyHenryHublinked,theyarecommerciallyveryattractive.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.13Figure16:ChinaLNGimportcontractsbycountry,Bcm160AustraliaIndonesiaMozambiqueQatar140USARussiaCanadaMalaysia1201002020202420282032203620408060402002016Source:NexantWGM,OIESTheoutlookforChina’sgasdemandisthereforehighlyuncertain.Whileitsuseissettogrow,thespeedandscopewilldependonpoliciesandprices.ButallscenariossuggestthatChinawillremainalargeglobalimporter.Atthesametime,gaswillstillaccountforasmallshareofChina’sprimaryenergyuse.Putsimply,China’simportancefortheglobalgasmarketmayeclipsethestrategicsignificanceofgasinthecountry’sdomesticenergyuse.AnygasoutagewillimpacttheChineseeconomy,mainlyindustrialusers,buttheavailabilityofcoalcouldoffsetsomeofthatimpactandlimitanycripplingdamagetoChina’seconomicactivity.Atthesametime,China’sdomesticgasproductionisstillsettoaccountforroughlyhalfofitssupplies,withthebalancemadeup(roughly)ofpipelineflowsandseaborneLNG.Butdespiteeffortsatdiversificationofland-basedandseaborneflows,aswellaseffortstoincreasegasstocks,muchlikewithoil,China’sviewsofitsgassecurity(orinsecurity)willbeinformedbyperceptionsasmuchasbymarketdynamics.Thiswillalsohaveimplicationsforthegeopoliticsofoilandgas.Inthisnextsection,wediscusssomeofthedriversthathaveinformedChina’srelationswithitskeyenergysuppliers,andthefactorsthatwilldeterminehowtheyevolveinthefuture.4.GeopoliticalimplicationsWhileoilandgasoutagesmaynotcrippletheChineseeconomy,theprospectofsanctionsstillloomslargeforChina’sdecisionmakers.AndeventhoughtheshareofoilandgasinChina’senergymixremainssmallerthaninmanyOECDcountries,mostscenariosandforecastsestimatethatforthenexttwodecades,Chinawillremainthelargestoilandgasimportingcountry.Asdiscussedabove,thisentailsrealandperceivedrisksforChina.Atthesametime,thechangingsupplyoutlooksuggeststhatChinawillincreasinglyrelyonasmallnumberofexporters:themajorityofChina’soilisexpectedtocomepredominantlyfromSaudiArabia,Russia,Iraq,andtheUSA,aswellasBrazilandpotentiallyIran,whileLNGwillbeimportedmainlyfromtheUSA,Australia,Qatar,andRussia.ThelatterwillalsobeakeyexporterofpipelinegastoChina,alongsideTurkmenistan.Theinterdependencebetweenbuyersandsellerswillthereforeincreaseconsiderably.ThissectionconsidersChina’srelationswiththeMiddleEast,Russia,andtheUSA.4.1IntheMiddleEast,energysecurityisthecore,butotherinterestsarestillsignificantEnergycooperationhasbeenattheheartofChina’sengagementwiththeGulfcountries,butovertheyears,Beijinghassoughttobalanceitstradedeficitwiththemajoroilproducersbyexportinggoodsandinvestingintheregion.BeyondthetraditionalarmsanddefencerelationsthatBeijinghasmaintainedsincethe1980s,Chinahasbroadeneditstraderelationstoadditionalsectorsincludingclean-tech,healthcare,infrastructure,andtechnology39.RelationswithIran,forinstance,whichinclude39BinHuwaidin(2002);Loft,etal.(2022);Gering(2023).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.14upstreaminvestmentsandoiltrade40,haveextendedtobanking,telecommunications,andhealthcare.Similarly,Sino–SaudirelationshavedevelopedinlargepartbecauseofChina’slargeoildependence,butthesedevelopedfromarmssalesinthe1980sandhavedeepenedasRiyadhlookedtosecureitsmarketshareinChinabydiversifyingitsrelationstoincludebothstate-ownedandprivaterefiners,andbyinvestingintheChinesedownstream.Atthesametime,theKingdomhassoughttoattractinvestmentsfromChinaintheoildownstreamandinnewenergy,evenassecuritytieshaveremainedlimited41.Thescopeanddepthofengagementhasvariedbycountry,butin2016Chinaarticulatedits‘1+2+3’regionalpolicyframework42,with‘1’beingthe‘core’ofenergytradeaswellasinvestmentsintheupstream(mainlyinIraqbutalsoinIranandtheUAE)andinthedownstream(inSaudiArabia).Tocomplementthis,relationsinclude‘twowings’of‘infrastructureconstructionandtradeandinvestmentfacilitation’;and‘threebreakthroughs’whichincludenuclearenergy,spacesatellites,andnewenergy.By2016,ChinabecamethelargestsourceofforeigninvestmentintheMiddleEast43.Atthesametime,Chinahasdevelopedeconomicandcommercialintereststhroughouttheregion,notjustinthePersianGulf.Ithas‘comprehensivestrategicpartnerships’withAlgeria,Egypt,Iran,SaudiArabia,andtheUAE;and‘strategicpartnerships’withIraq,Jordan,Kuwait,Morocco,Oman,Qatar,andTurkey44.ChinahasalsodevelopedsignificanttradeandinvestmenttieswithIsrael45.Inthisvein,astieswiththekeyoilsupplierssuchasSaudiArabia,Iraq,andIran,aswellaswithQatarforLNG,aresettodeepen,Beijingwilllikelywanttobalanceitsrisingtradedeficitandexpandthemutualdependencythroughadditionaltradetiesandinvestments.Itremainstobeseen,though,ifChinaseeksandisabletoobtainparticipationintheGulf’senergyupstreambeyondSinopec’s5percentstakeinQatar’sNorthFieldEastLNGtrain46.4.2Rethinkingnon-interference?Todate,Chinahasbeenreluctanttobecomeembroiledintheregion’slong-runningconflicts,recognizingandbenefittingfromthefactthattheUSAremainsthedominantmilitarypowerintheregion47.Chinahasseemedwaryofdisruptingadelicateandvolatileorder.Beijinghasworkedwithmostregionalcapitalswhileseekingtokeepthematarms’length,consciousofthefactthatdeepertiescouldalienatekeyregionalplayersandthreatencommercialgains.Atthesametime,itsinclusivenesshaskeptthedoorstoregionalcapitalsopen.Yetincreasingly,eventhoughBeijingseemsunlikelytocompeteformilitarysupremacyintheregion,ChinaseemstoestimatethatitcancompetewiththeUSAthroughrule-andnorm-setting,inacompetitionfor‘discoursepower’48.AsChinalookstoadvanceanewmultipolararchitecture,whereithasgreaterpowertosetglobalagendasthatreflectitsinterestsandvalues,theMiddleEastcouldbeatestingground.Moreover,China’sBeltandRoadInitiativehaspresentedapositivevisionoftheMiddleEastinthebroaderEurasiancontextwhichstandsinstarkcontrasttoWesterncapitalsthatseetheregionasaproblem49.GulfstateshavethereforewelcomedChina’sincreasingengagementintheregion,bothfortheeconomicopportunitiesitoffersandasahedgeagainstdecliningUSengagement.Moreover,GulfcountriescanleveragethecompetitionbetweentheUSAandChinatoextractadvantageousdealsorsecurityguarantees(todatemostlyfromtheUSA).Indeed,todate,theUSsecurityarchitecturehasbeendominantintheregion,butChinahasincreasedmilitaryanddefenceengagements(mainlythroughjointtraining).BeijingestablisheditsfirstoverseasbaseinDjiboutiin2017buthaskeptitsnavalpresencetherelimited.ButasChina’snavalpowerandglobaleconomicinterestscontinuetogrow,thereislikelyagrowingappreciationinBeijingofthevalueofbasingforcesinfriendly,geo-strategicallyimportantstates.WithUSforcesgraduallyredirectedtoAsia,andasenergyandother40HaroldandNader(2012).41Reidel(2020).42People’sRepublicofChina(2016).43Meierding(2022).44Fulton(2019).45Eilam(2022).46ElDahanandMills(2023).47Gering(2023).48Anon.(2019).49Fulton(2019).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.15tradewiththeMiddleEastwillremainsignificant,China’snavycouldfocusonexpandingoverseas.ManygovernmentsintheMiddleEasthavebeendeepeningtheirtieswithChina’smarketsandbuyingdefenceequipment,especiallyastheyhavebecomeconcernedthatUScommitmenttotheregioniswavering.50ThiscouldsetanexpectationintheregionthatChinawillbemorethana‘freerider’ontheUSsecurityumbrellaintheregion.TotheextentthattheUSAislessengagedintheregion,andasChina’sinternationalcloutgrows,Chinawilllikelybecomemoreactivepoliticallyanddiplomaticallyintheregion.Moreover,ifitconsidersthatitsrelationswiththeUSAareonadownwardspiral,therewillbefewerincentivesforChinatoyieldtoUSpressureifthetwocountries’interestsdiverge51.China’sroleinbrokeringadealtoendsevenyearsofestrangementbetweenSaudiArabiaandIraninMarch2023ishugelysignificantinthiscontext.ThisisthefirsttimeChinahastakenanactiveandleadingroleinMiddleEasternpolitics,capitalizingonthestrengthofitsrelationswithbothsides.Butsincethedealwasalreadyinthemakingsince2021withIraqiandOmanimediation(andtacitUSbacking),Chinamayhavehadlittletolose52.Atthesametime,itwouldhavemuchtogainfromitspositionastrustedgo-between.Andinthecontextofincreasinglyzero-sumcompetitionbetweentheUSAandChina,thiswinforChinaisseenasalossfortheUSA53.ChinahasalsoannouncednewenergydealswithbothSaudiArabiaandIranshortlyafterthedealwasannounced.ButthisdoesnotnecessarilymeanthatChinawillwanttopursueitsmediatorroleanyfurtherinthornierregionalissues,especiallyifthereisariskthatitwouldneedtostepinwithsecurityguaranteesorriskitsowninterests.TheextenttowhichChinawillbeabletoadvanceitsvalueswithoutgettinginvolvedinregionalconflicts,orhavingtooffersecurityguarantees,isanopenquestion.MuchwilldependontheUSpositionanditsinvolvementintheregion,andonproducercountries’willingnesstorelyheavilyonChinaforeconomicandmilitarystability.Moreover,somecountriesintheregionwilllikelybelesssuccessfulthanothersinmanagingtheirenergytransition,andwithdecliningrevenuesfromoilandgasresourcescouldsufferfrompoliticalinstability.TheextenttowhichChinawilluseitsinfluencetomediateconflicts,andhowfarregionalpowerswillwelcomethatinvolvement,areopenquestions.4.3ChinaandRussia—isenergyameansoranend?UnlikewiththeMiddleEast,China’srelationswithRussiaarenotunderpinnedbyenergy.WhiletheenergypotentialwasclearsinceChina’sdemandforoilbegantoskyrocketintheearly1990s,energycooperationwasconstrainedbymutualdistrustaswellasdifferentcommercialandstrategicpriorities.Duringthe1990s,whenoilpriceswerelow,RussiasoughttoexpanditsenergycooperationwithChina,butBeijingwasreluctanttocommittoexpensivecross-borderpipelines.AsChina’simportssoaredinthemid-1990sandconcernsaboutdependencyonseaborneflowsroseinBeijing,RussiawasloathtocommittodeeperintegrationwithChina.China’seconomicrisewasinstarkcontrastwithRussia’seconomicturmoil,leadingtoconcernsinMoscowaboutBeijing’sgrowinginfluence,especiallyasChinabeganlookingtosecureoilandgaspipelinesfromCentralAsia,offeringCentralAsianstatesvitalnon-Russianexportroutes54.Theglobalfinancialcrisisandthefallinoilpricesfacilitatedabreakthrough,withChinalendingRussianenergycompaniesUS$25billioninexchangeforthecompletionofanoilpipelinetoChina—theEasternSiberia–PacificOcean(ESPO)pipeline—anda20-yearoilsupplycontract55.Oilfromthepipelinestartedflowingin2011,butasasignofRussia’sreluctancetorelysolelyontheChinesemarket,the50HerzingerandLefkowitz(2023).51ItshouldbenotedthatwhilebothcountrieswouldfavourstabilityintheMiddleEast,theydifferonhowtoachievestability.52ItisinterestingtonotethatChinadidrufflesomediplomaticfeathersintheMiddleEastinlate2022:DuringXiJinping’striptoSaudiinDecember2022,ajointstatementissuedduringthefirstChina–GulfCooperationCouncil(GCC)summitirkedTehranwhenitemphasizedtheneedtoaddressIran’s‘destabilisingregionalactivities’and‘supportforterroristandsectariangroupsandillegalarmedorganisations’.ThestatementfurthercalledforapeacefulresolutiontotheissueofthethreeislandsinthePersianGulfwhereIranandtheUnitedArabEmirateshaveterritorialdisputes—asensitivetopicinIranwhichreportedlyledtoasternconversationwithChina’sambassadortoIranandtheexpressionofTehran’sstrongdissatisfaction.Whetherthiswasrelatedtothisdealisanopenquestion,butitdoessuggestthatBeijinghadstartedtakingpositionsonregionalpoliticalissues.53AlthougharguablyaresolutionisalsointheUSA’sinterest,seeAtlanticCouncil(2023).54Blank(2006);Burles(1999).55Downs(2010).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.16pipelinewasfurtherextendedtothePacificCoastin2013.ESPOwasaboonforChinaandAsiaasitprovidedanalternativetoMiddleEasternflows.Atthesametime,ChinaandRussiawerenegotiatinganeconomicallychallenginggaspipelineproject.ThePowerofSiberiacontractwassignedinShanghaiinMay2014followingtenyearsofnegotiationandwasconcludedpartlyduetoRussia’sisolationfollowingtheimpositionofWesternsanctionsoveritsannexationofCrimea56.ThePowerofSiberiapipelinestartedupaheadofschedulein2019,withflowsrampingupgraduallytoreachthefull38Bcmacapacityin2025.ChinaandRussiaalsoagreedin2022anadditional10Bcma57.Discussionsaboutanadditional50Bcmagaspipeline(PowerofSiberia2)areongoing,withGazpromannouncingfeasibilityprojectseventhoughBeijingislargelysilentonthisprospect.JustaspoliticalanimositylimitedSino–Russianenergyrelationsinthe1990s,ChinaandRussia’ssharedantipathytowardtheUSAhasallowedenergytiestogrow,bolsteringbilateralties.TheRussianinvasionofUkrainein2022furtheracceleratedRussia’sneedtopivotEast,givingChinaconsiderableleverageoveritsneighbour58,especiallyinthenegotiationphase.ButifChinaandRussiadidsignthedealforPowerofSiberia2—whichwouldonlystartflowinginthelate2020sorearly2030s—ChinawouldbecomehighlydependentonRussia.AslongasRussiaremainsisolatedinternationally,thisdependenceisunlikelytoposeasecuritythreattoChina.Onthecontrary,itwillgiveBeijingconsiderableleverage,especiallyifgasdemanderrsonthelowersideoffutureforecastsandChinesetraderswillbeabletore-exportgasandbeinastrongbargainingpositionwithothersuppliers.ButifRussia’srelationswithChinaworsen,itspenchantforusingenergyasaweaponcouldbecomeavulnerabilityforChina.4.4ChinaandtheUSA—theelephantintheroomChina’soilandgasimportsfromtheUSAbegantimidlyin2015,risingin2017–2018andreachingrecordlevelsin2020(Figure17andFigure18).SomeflowsofUScrudetoChinaemergedwhentheUSAlifteditsexportbanoncrude,allowingrefinersinChinatoexperimentwithanewsupplysource.Similarly,USexportsofLNGtoChinabeganin2016,whenCheniere’sSabinePassterminalcameonline,althoughsalestoChinaweremostlyspotratherthanthroughlong-termcontracts.MuchlikewithRussia,theUSA’sriseasalargeenergyexporterwasapotentialmatchforChina’senergyappetite,especiallyasitallowedChinesebuyerstodiversifytheiroilandgasimports.Then,aspartofanescalatingtradewarwiththeUSA,ChinaimposedtariffsonUSLNGinSeptember2018,whichitfurtherraisedinJune2019,followedbytariffsonUScrudeinSeptember2019,leadingUSexportstoChinatoplummet.Figure17:China’scrudeimportsfromtheUS,thousandb/dSource:ChinaCustoms56Chow(2021).57YermakovandMeidan(2022).58Yermakov(2023).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.17Figure18:China’sLNGimportsfromtheUSA,Qatar,andRussia,BcmSource:ChinaCustomsDespitetheescalationintensionstherewereanumberofinitiativestostrengthenties,andinFebruary2018thefirstlong-termcontractwassignedbetweenCNPCandCheniereEnergy59.AmoredecisiveturningpointcameinFebruary2020whentheChinesegovernmentissuedtariffwaiversforanumberofproducts,includingLNG,aspartofanagreementwiththeTrumpadministrationtode-escalatethetradewar.ThephaseonetradeagreementthatwassubsequentlysignedcalledforChinatobuy$52billionworthofUSenergyabovethe2017baselinein2020–2021.Thesetargetshavenotbeenmet60.ButUSLNGflowstoChinahaveincreasedsince,andaresettorisegiventhatChinesecompanieshave,between2021and2022,signedanestimated22mtpaofLNGsupplycontractswithUScompanies(Figure19).TheappealofUSLNGcontractshasbeentheattractivepricingarrangementsfromthem,asmanyarelinkedtoHenryHub.Figure19:ChineseLNGSalesandPurchaseAgreements(SPAs)signedin2021–2022bycountry(percent)Source:OIESGoingforward,theUSAandChinawillbeincreasinglyinterdependentforoilandgas.Whilethiscreatesopportunities,italsocreatesvulnerabilitiesforbothsides:theUSAcouldrestrictoilandgasflowstoChina,therebyimpactingtheavailabilityandcostoftheseresources,butthatwouldhurtUScommercialinterests.Moreimportantly,oilandgastradeisunlikelytoalterthetrajectoryofUS–Chinarelations,59CheniereEnergy(2018).60Brown(2022).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.18althoughtheycanbecomeadeliverableineffortstoimproveties.BoththeUSAandChinawillhavetomanagethegrowingoilandgasinterdependencewitheffortstode-riskbroadersupplychains,includingsupplychainsfornewmaterialsneededfortheenergytransition.Overall,oilandgaswillaccountforasmallershareofChina’senergymixwhilelargereservesofoilandgaswouldmitigateagainstshort-termoutages61.ButChinawilldependonasmallernumberofsuppliers,andwithglobalconsumptionpatternsalsochanging,thisgrowingreliancewillbemutual.ProducerswillcompetetosecuretheirmarketshareinChinajustasChinawillremainpreoccupiedwithitsenergysecurity.Theselinkageswillalsocreatenewcommercialopportunitiesandrealities,especiallyasChinalookstode-riskandsanction-proofitseconomy.Already,Chinahasdevelopedmechanisms(withthehelpofproducercountries)tokeepreceivingsanctionedcrudes,therebyfacilitatingsanctionevasionandafragmentationofglobalmarkets.YetunlessChinabecomeseconomicallyself-sufficientmorebroadly(forexampleinfoodandtechnology),itwillstillrelyonglobaltrade.China’seffortstoprotectagainstsupplycut-offshavealreadyledtothedevelopmentofagrowingnavalpresence(bothcivilandmilitary)andalongsidethecountry’sgrowingglobaleconomicfootprint,Beijingislookingtoshapeinternationalinstitutionsandtradingnormsinabidtohedgeagainstpotentialsanctions.5.BeyondoilandgastradeChina’sperceptionsofitsenergyinsecurityandsenseofvulnerabilityextendbeyondthemarketrealitiesortheavailabilityofenergysupplies.GivenrisingtensionswiththeUSA,Beijingisincreasinglylookingtosanction-proofitseconomy.ItsenergypoliciesandenergydiplomacywillincreasinglyseektodetertheUSAandWesterngovernmentsfromimposingsanctionsonChina;or,giventheperceivedinevitabilityofdecoupling,willmakesanctionsdifficulttoimpose.China’sviewsonthegeopoliticsofenergywilldependonseveralfactors,includingthefollowing.ProgresstowardChina’senergyindependence:ProgresstowardtheenergytransitionandgreaterrelianceondomesticfuelswillincreaseBeijing’senergysecurityandresilience.Putsimply,ifChina’soilandgasimportsaccountforasmallershareoftheenergymix,andaslongasChinaholdssignificantstocks,anysharppriceincreasesorthreatsofcurtailmentwillhavealimitedimpactoneconomicactivity.ButmarketrealitieswillstillbeonlyonepartofChina’spolicy-makingprocess.Perceptionsofitsinsecuritywillalsobesignificant.Inthiscontext,thestateoftheUSA,US–Chinarelations,andChina’srelationswiththeWestwillbecriticalforChina’senergysecuritypolicies.China’ssenseofvulnerabilityissettoremainsignificantaslongastheUSAremainstheworld’slargesteconomicandmilitarypowerandBeijingassessesthatWashingtonislookingtocontainit.Chinawillseektohedgeandensureitsenergysecurity(andbroadereconomicsecurity)intheeventofaconflictwiththeUSA.Ifcurrentpoliciesandattitudescontinue,ChinawillwanttobuildcoalitionsaimedatweakeningtheUSA’sabilityto‘containandsupress’China.Beijingwillcontinuetodeepenitsrelationswithenergysuppliers(aswellassuppliersofotherrawmaterials)sothat,intheeventofdeeperdecouplingoraconflict,theywillstruggletopickbetweentheUSAandChina,orwillopttoalignwithChina.China’sroleintheglobalfinancialsystemandtheuseofRMBinglobaltrade:TheRMBseemssettobecomeamoresignificantinternationalcurrency62.EventhoughtheRMBmaynotbecometheglobalcurrencyofchoiceforcommoditytradinganytimesoon—andChina’sRMB-denominatedcrudeoilbenchmarkisfarfrombecomingaglobalbenchmark63—Beijingislookingtoincreaseitsinternationalimportance,justasothercountries(andcompanies)arelookingtomoveawayfromtheUSdollar.CorporatesandgovernmentsarealsolookingtousecurrenciesotherthantheUSdollarasameansofminimizingforeignexchange-aswellassanctionsrisk.TheuseofalternativepaymentandsettlementmechanismssuchasChina’s61IntheeventofaprotractedwarbetweenChinaandtheUSA,thenegativeimpactonboththeChineseandUSeconomieswouldlikelyfaroutweightheoilandgasdimension,withfar-reachingimplicationsforbotheconomiesand,byextension,fortheglobaleconomy.62Prasad(2017).63MeidanandImsirovic(2020).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.19Cross-BorderInterbankPaymentSystem(CIPS)couldgraduallyreduceChina’sexposuretothedollar-basedglobalfinancialsystemandsupporttheuseoftheRMB.Suchmoves,althoughtheyareverynascent,havealreadyfacilitatedsanctionsevasion64.Thatsaid,China’slargestoilsuppliersintheMiddleEasthavebeenreluctanttotradeinRMB65todate,butthepushawayfromtheUSdollarcouldbejustaspowerfulasthepulltowardtheRMB,especiallyiffinancialreformsinChinagivegreaterconfidenceabouttheRMB’sconvertibilityandliquidity.Morenon-dollar-basedtradingwouldleadtothecreationoffinancialproductsinothercurrenciesandalterthecurrentfinancialtradingarchitecture,inturnalsoreducingtheUS/West’sabilitytoimposefinancialsanctionsonChinaanditstradingpartners.ConclusionsChina’soilandgasinsecurityisasmuchaboutgeopoliticalperceptionsasitabouttherealityofthecountry’simportdependence.Today,oilandgasaccountfor27percentofChina’sprimaryenergymix.Despiteitslargeimportdependence,mainlyforoil,Chinacurrentlyholdslargepetroleumreservesthatwillhelpmitigatetheeconomicimpactofanyshort-termsupplyshortage.Goingforward,asChinaelectrifiesenduses,itsoildemandwillpeakanddeclineasearlyasthe2030s.Gasdemandissettoriseforanotherdecadebeforestartingtopeak,buttheavailabilityofdomesticallyproducedcoal,andincreasinglyofrenewables,offersChinaconsiderableflexibilityandsupplysecurity.However,theperceptionofriskremainshigh.AndevenifChinapursuesanaggressivepathwaytonetzero,itisexpectedtoremaintheworld’slargestoilandgasimportingcountryforanothertwodecades.AsrelationswiththeUSAseemsettocontinuedeteriorating,China’ssenseofinsecurityaboutitsenergy(andwiderresource)dependencywilllikelyremainhigh.Beijingwillthereforecontinuetodeepentieswithitssuppliers,focusinginparticularonanumberofexporters,notablytheMiddleEast(SaudiArabia,Qatar,Iraq,andIran)andRussia,especiallywheretheycouldcomplicatetheUSA’seffortstocontainChina.AndaslongastheUSAremainsthedominantnavalpower,Chinawilllikelycontinuetodevelopitsnavalpresenceandmilitarycapabilities.Atthesametime,Beijingwillpursueitseffortstodiversifysuppliesasmuchaspossible,relyingonbothland-basedpipelinesandseaborneflows,whilecontinuingtodevelopaccessthroughtheNorthernSeaRoute.ButaccesstooilandgasarenotthesoledriversofChina’sdiplomaticorsecuritystrategies.China’sdiplomaticandstrategiccalculuswillbeinformedbyabroaderdesiretosanction-proofitseconomyandexpanditsglobalinfluence.China’sdependenceonotherimportedcommodities(grains,criticalmaterials,andothers)allpointtoalargeglobalfootprintandcontinuedconcernsaboutphysicalaswellasfinancialchokepoints.BeijingwillalsowantabroadsupportbasetocountertheUSAandpromoteitsownviewsofglobalgovernance,suggestingthatitwillstillneedtobalanceeconomic,commercial,andstrategicinterests.ItsconcernsaboutUSeffortstosupressitsgrowtharenotlimitedtooilandgas,andthereforeitsdiplomaticrelationswillseektocreatebroadermarketaswellasgeopoliticalopportunities.UnlessBeijingmanagestobecomeself-sufficientforfoodandenergyandestablishanRMB-denominatedfinancialsystem,ortheUSA’spowerweakens,Beijingwillneedtomanageandhedgeitsexternalvulnerabilities.Atthesametime,itsenergysupplierswillalsohaveleverageoverChinaasbothbuyersandsellerswillbelockedintocloserinterdependence.Butproducerswilllikelyseektomitigateagainstover-relianceonChinabyleveragingrelationswithotherregionalandglobalpowers.Maritimechokepointswillremainasourceofvulnerability,aswillthedollar-basedfinancialsystem.Similarly,amultipolarworld—inwhichvariouspowersincludingtheUSA,theEuropeanUnion,India,China,andperhapsothers(Iran/SaudiArabia)projecteconomic,financial,andmilitarypower—couldbeasourceofvulnerabilityorofsecurity,dependingonhowChinachoosestodefineandassertitsgrowingpower.64ZongyuanZoeLiu(2022).65Blas(2023).Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.20BibliographyAndrews-Speed,P.andMeidan,M.(2022).‘The2021EnergyCrisis:ImplicationsforChina’sEnergyMarketandPolicies’,OxfordEnergyForum,131.https://a9w7k6q9.stackpathcdn.com/wpcms/wp-content/uploads/2022/03/OEF-131.pdfAnon.(2019).6thShanghaiForumonMiddleEastStudies—’China’sMiddleEastDiplomacyandRelationswithMiddleEasternCountriesundertheCurrentDevelopments:Opportunities,ChallengesandResponses,’’SIIS,29September.https://brgg.fudan.edu.cn/articleinfo_5219.htmlAtlanticCouncil(2023).‘Expertsreact:IranandSaudiArabiajustagreedtorestorerelations,withhelpfromChina.Here’swhatthatmeansfortheMiddleEastandtheworld’,NewAtlanticist,10March.https://www.atlanticcouncil.org/blogs/new-atlanticist/experts-react/experts-react-iran-and-saudi-arabia-just-agreed-to-restore-relations-with-help-from-china-heres-what-that-means-for-the-middle-east-and-the-world/BinHuwaidin,M.(2002).China’sRelationswithArabiaandtheGulf,NewYork:Routledge-Curzon.Blank,S.J.(2006).‘TheEurasianEnergyTriangle:China,RussiaandtheCentralAsianStates’,BrownJournalofWorldAffairs,12(2),53–67.Blas,J.(2023).‘ThemythoftheinevitableriseofaPetroyuan’,Bloomberg,27February.https://www.bloomberg.com/opinion/articles/2023-02-27/pricing-petroleum-in-china-s-yuan-sounds-inevitable-not-for-saudi-arabia?leadSource=uverify%20wallBloombergNews(2020).‘ThesecretoriginsofChina’s40-yearplantoendcarbonemissions’,BloombergNews,23November.https://phys.org/news/2020-11-secret-china-year-carbon-emissions.htmlBoute,A.andFang,M.M.(2022).‘China’stextbookapproachtoregulatoryreformofthenaturalgasmarket’,UtilitiesPolicy,76,101369.https://www.sciencedirect.com/science/article/abs/pii/S0957178722000340BP(2022).BPStatisticalReview2022,https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfBP(2023).EnergyOutlook2023.https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2023.pdfBrown,C.P.(2022).‘US–Chinaphaseonetracker:China’spurchasesofUSgoods’,PetersonInstituteforInternationalEconomics,19July.https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goodsBurles,M.(1999).ChinesePolicytowardRussiaandtheCentralAsianRepublics,SantaMonica,CA:RandCorporation.https://www.rand.org/pubs/monograph_reports/MR1045.htmlCET(2022).ChinaEnergyTransformationOutlook2022,ChinaEnergyTransformationProgram,EnergyResearchInstitute,ChineseAcademyofMacroeconomicResearch.https://www.cet.energy/2022/06/28/ceto_2022/CheniereEnergy(2018).‘CheniereannouncesLNGsaleandpurchaseagreementswithChinaNationalPetroleumCorporation’,Pressrelease,9February.https://lngir.cheniere.com/news-events/press-releases/detail/170/cheniere-announces-lng-sale-and-purchase-agreements-withChow,E.(2021).‘Sino-Russianenergyrelations:Amatchmadeinheaven?’,CarnegieEndowmentforInternationalPeace,29January.https://carnegiemoscow.org/commentary/83757CNPCETRI(2022).EnergyOutlook2060,ChinaNationalPetroleumCorp(CNPC)Economics&TechnologyResearchInstitute(ETRI).Collins,G.(2018).‘AmaritimeoilblockadeagainstChina—Tacticallytemptingbutstrategicallyflawed’,NavalWarCollegeReview,71(2).https://digital-commons.usnwc.edu/cgi/viewcontent.cgi?article=1735&context=nwc-reviewCollins,G.B.,Erickson,A.S.,Goldstein,L.J.,andMurray,W.S.(eds)(2008).China’sEnergyStrategy:TheImpactonBeijing’sMaritimePolicies,Annapolis,MD:NavalInstitutePress.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.21Downs,E.S.(2004).‘TheChineseenergysecuritydebate’,ChinaQuarterly,177,21–41.https://doi.org/10.1017/S0305741004000037Downs,E.(2010).‘Sino-Russianenergyrelations:Anuncertaincourtship’,inBellacqua,J.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