An Empirical Analysis Of The Risk Of Crude Oil Imports In China And Strategy Discussion

Oil, as important industrial raw material and strategy supply, plays a key role in economic development and realizing national strategy. Whether the oil supply can be guaranteed or not directly relate to the politic, economy and military's safety. Along with the fast development of national economy, oil demands are in high speed of increase in China. The home supply of oil is obviously not enough and the importation is increasing quickly. The dependence on foreign oil is also becoming larger and larger, especially on Middle East and Africa. With the large oil importation and high dependence on foreign oil, the risk of China's oil import presents an upward trend, which effects the steady supply of oil and has made the issue of oil security more prominent.We mainly discuss China's crud oil import security on the basis analyzing of the different supply sources and the risks from them. We quantify the diversification index of China's crude oil import and the risk index of crude oil import based on HHA and portfolio theory.First we analyze the present situation of oil security and the relationship between the oil import risk and china's oil security. Second, we analyze the international environment of China's oil import in several aspects: the conditions of the world oil resources, the market environment of international oil, geopolitics, and the situation of oil transportation. We know that the interruption of the oil supply will still exist, and the Chinese oil import risk becomes larger because of the world geopolitics. As the present situation(the gap of supply and demand is enlarging year by year, the sources are overly concentrated, the passages are simplex, and the disputations of South China Sea and Taiwan problem) of the oil's import in China is concerned, the risk of China's oil import can not be neglected. Third, we analyze comparatively the diversification of oil import, oil the risk of import and energy security policies of main oil import countries, which can give us some recommendations for reducing Chinese oil import risk and energy security policies. Then, we quantify the diversification index of Chinese crude oil import based on HHA and calculate the crude oil import risk of China using portfolio theory, and finally, important countermeasures about the diversification of sources and transports to evade Chinese crude oil import risk were discussed. At last we come to the conclusion that the diversification index of China's crude oil import presents a downward trend and the risk of China's crude oil import presents a fluctuating upward trend. China's crude oil import should gradually reduce its dependence on the Middle East, and also reduce the dependence on countries whose risks are high and increase the importations from those whose risks are relatively low.