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China moving closer to Middle East oil

June 27, 2012 at 7:34 AM
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HONG KONG, June 27 (UPI) -- A series of moves in the international sector has pushed China closer to the Middle East in terms of its oil demand, an analyst said.

Sanctions against the Iranian oil sector go into force this weekend, leaving consumers searching for alternatives to shore up the difference. Meanwhile, instability in Sudan, an economic partner to the Chinese has exposed risk in that option for oil.

Ben Simpfendorfer, a consultant at Silk Road Associates in Hong Kong, told The Wall Street Journal there were a series of developments that were pushing China closer to the Middle East.

"You have a convergence of what are very powerful trends, whether it's China's rising demand, the U.S.'s declining demand, the rise of Iraq as a substitute to Iran," he said. "These are quite powerful trends that bind China to the Middle East."

The International Energy Agency estimated Chinese oil imports could increase by 5 million barrels per day to 12 million bpd by 2035.

The U.S. Energy Department finds that the United States is moving away from oil imports from the Middle East as domestic production ramps up.

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