China's Oil Security System Build-up

  • Date:2011-05-04
  • Source:CCIEE

The financial property of the oil has become increasingly evident, oil security is essentially gone from "production - supply" type of "supply security" mode into "Trade - Financial" type "price security." To ensure oil security, we should coordinate the relevant agencies and the petroleum and petrochemical companies, co-ordinate stakeholders, and establishing and improving oil security system. Present and future for a long time, based on the complexity of oil security and strategic, we can not discuss oil security just from the resources, imports, reserves side. Oil security must be placed in the national strategic level to consider, and should be incorporated into the national long-term strategic planning.

Oil security system is a huge strategic system, should be established as "one core, four pillars, five complementary measures" as the main content oil security system, essentially to create a strong safety net for oil. The so-called "one core" refers to the financial strategy of the oil system as the core, the basic operation of the platform is a unified, open, competitive, and orderly, Standard and efficient multi-level oil trading market. On this basis, "four pillars "refers to the four major financial services as the strong pillars: oil exchange, oil bank, oil fund, oil derivatives, these five aspects constitute the core of the oil system of the financial strategy. Around this core, oil security must also be supporting other strategic systems and support; this is the so-called "five complementary measures ", including: reform and improve the national oil management system, strategic oil reserve system, oil domestic supply system, Oil alternative strategy system, oil international cooperation system.

Keywords: Oil security, oil security system, financial strategy of the oil, financial strategy of the oil system.


1.1 Strategic Position of Oil 
1.1.1   Important Role of Oil for Economic Development 
1.1.2   Strategic Position of Oil in National Defense and Military 
1.1.3   Strategic Position of Oil in Country's Foreign Affairs 
1.1.4   Oil Security Directly Related to National Economic Security 
1.2   Implication, Evolution and Essence of Oil Security 
1.2.1   General Implication of Oil Security 
1.2.2   Different Understandings and Perspectives on Oil Security: Theory and Practice 
1.2.3  Basic Definition of the Oil Security in This Research 

2.1  Overview of Reserves of Oil Resource in the World 
2.1.1  Decline of Growth Rate of Global Oil Reserves 
2.1.2  Relatively Concentrated Distribution of World's Oil Resources 
2.1.3  Proportions of Reserves in Untraditional Oil Producing Regions Have Increased 
2.1.4  Great Potential of Offshore Oil Resources 
2.2  Status of World Oil Demand (Consumption) 
2.3  Status of World Oil Supply (Production) 
2.3.1  World’s Crude Oil Output Steadily Rises 
2.3.2  Middle East is Still the Core of Crude Oil Production 
2.3.3  World’s Oil Refining Industry Transfers from the Developed Countries into Developing Countries 
2.4  Changing Trend and Future Prospect of World’s Oil Supply and Demand 
2.4.1  Prospect of World Oil Demand 
2.4.2  Prospect of World Oil Supply 

3.1  Financial Property of Oil 36
3.1.1  Financial Property Defined by the Supply-and-Demand Characters of Crude Oil
3.1.2  Financial Property of Oil Defined by the Imbalance in the Space Distribution of the Oil Supply and Demand in the World 
3.2  Financialization of International Oil Market 
3.2.1  Financialization of the Oil Pricing Mechanism 
3.2.2  Close Relationship between Oil and International Monetary System 
3.2.3  International speculative capital's speculation and manipulation on oil market 
3.2.4  Financial operation of International Oil Fund
3.3  The formation mechanism and pricing methods of oil price 
3.3.1  Formation theory of international oil price 
3.3.2  Pricing mechanism and method of international oil 
3.3.3 Historical trend and influencing factors of international crude oil price 
3.4  Basic judgments on international crude oil price and its future trend in recent years 

4.1  Oil supply security:The bottleneck constraint of oil supply is increasingly prominent 
4.1.1  The contradiction between oil supply and demand in China continuously worsened 
4.1.2  Continuous increase of dependency on foreign oil supplies 
Source:Wind Information 
4.1.3  The source areas of petroleum imports are limited and concentrated, and the oil transportation is mainly by sea, featured as single route, weak control and over-dependence on foreign tankers 
4.1.4  The Strategy of “Going Global” with Uncertainties 
4.1.5  Insufficient oil reserves cannot handle accidental supply disruption or supply
4.1.6  Imperfection of management system and mechanism in the oil industry 
4.1.7  The competitiveness of Chinese oil enterprises is poor and their international market experience is insufficient 
4.2  The security of petroleum price:The great volatility of international oil price has more and more significant influences on China’s oil security 
4.2.1  The brief history and development of petroleum pricing mechanism in China 
4.2.2  The main issues in China’s current oil pricing mechanism 
4.2.3  Research on Interactive Relationship between International and Domestic Crude
Oil Price 
4.2.4  The Impact of International Oil Price Fluctuation on China’s Economic and Financial Security 
4.3  The Development Trend of China’s Oil Security: Severe Challenge 
4.3.1  Forecast of China’s Oil Supply: The Outlook is not Optimistic 
4.3.2  Forecast of China’s Oil Demand: Strong Growth in Consumption 
4.3.3  International Contention for Oil Pricing Right: Crisis is Increasingly Evident 

5.1  Expediting the establishment of oil financial strategic system 
5.1.1  Establishing multi-level oil trading market system centered on futures market 
5.1.2  Apply oil foreign exchange in a flexible way 
5.1.3  Establish oil bank system: oil policy bank and oil commercial bank 
5.1.4  Establish oil fund system: oil industry investment fund, oil financial investment fund and oil integrated fund 
5.1.5  Establish oil derivatives market system: oil bonds, oil options, oil insurances and relevant derivatives 
5.2  Reform and improve national oil management system and oil pricing mechanism 
5.2.1  Establish perfect oil market operating mechanism and oil industry management system 
5.2.2  Further reform and perfect oil pricing mechanism
5.3  Accelerate the establishment and completion of oil strategic reserve system 
5.3.1  Accelerate the establishment and completion of spot strategic reserve or physical strategic reserve of oil 
5.3.2  Establish oil futures strategic reserve or oil foreign exchange reserve 
5.4  Enhance the exploration and development of domestic resources and strengthen the construction of domestic oil supply system 
5.4.1  It is the fundamental guarantee for oil security to set a foothold on domestic oil resource and enhance the exploration and development 
5.4.2  Protect marine rights and enhance the development of marine oil resources 
5.4.3  Enhance the comprehensive management of oil industry and further improve the overall strength of energy industry to ensure basic oil supply. 
5.5  To Accelerate the Transformation of the Economic Development Mode and Establish the Strategic System for Replacement of Petroleum 
5.5.1  To Transform the Economic Development Mode, Promote the Optimization and Upgrading of the Industrial Structure and Whittle Down the Demand for Petroleum 
5.5.2  To Extensively Carry Out Energy-Saving Activities, Optimize the Energy Structure and Enhance the Energy Utilization Efficiency 148
5.5.3  To Step Up Development and Utilization of the Alternative energy for Oil 
5.5.4  To Strengthen Development of New Energy Sources 
5.5.5  Exert Great Efforts to Develop Natural Gas Industry 
5.6  Actively Participate in International Oil Competition and Cooperation, Build up International Cooperation System in Oil and Expedite the “Going Out” Strategy 
5.6.1  Further Develop Import Trade in Oil, Diversify Import Channels, Establish Diversified Oil Supply System, Make Efforts to Realize Diversified Import Origins, Modes, Varieties and Channels, and Decentralize the Risks to the Greatest Extent as Possible 
5.6.2  Building Diversified Oil Transportation Thoroughfares to Ensure Secure Transportation of Imported Oil 
5.6.3  Proactively Carry out the “Going Out” Strategy to Make Investments in Foreign Oil Resources Exploration, Exploitation and Processing for Oil in Return by Income from Investment so as to Fully Utilize Foreign Oil Resources 
5.6.4  Actively Participate in International Oil Market Operation to Affect the Forming of International Oil Price to the Greatest Extent as Possible 
5.6.5  Intensify Oil Diplomacy Efforts and Improve Relations with Oil Exporting Countries