China looking to secure oil supply?

Jan. 11, 2012 at 1:44 PM
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BEIJING, Jan. 11 (UPI) -- Chinese Premier Wen Jiabao will embark on a six-day tour to the Middle East aimed at strengthening the country's energy supply, analysts said.

Wen's itinerary -- which includes Saudi Arabia, the United Arab Emirates and Qatar -- suggests energy will be a focal point of his tour, the first official visit by a Chinese premier to the region in 20 years.

It also comes amid controversy regarding Iranian oil exports, of which China relies on for about 11 percent of its oil imports, up from 9 percent in 2010.

Iran has threatened to close the Strait of Hormuz, one of the world's most vital oil routes, if Western countries impose sanctions on its oil exports.

"Half of China's oil imports are sourced from the Middle East, so the region's instability is a major concern," the Financial Times quoted Ben Simpfendorfer, founder of Silk Road Associates, a Hong Kong based consultancy, as saying.

"Conflict with Iran tops the lists of worries, should it disrupt physical oil supplies. There is also the risk that the Middle East starts to call on China to play a bigger role in the region, no different to the other major powers," Simpfendorfer said.

U.S. Treasury Secretary Timothy Geithner, in Beijing Wednesday, urged Chinese officials to curb Iran oil imports and will visit officials in Japan and South Korea with the same message.

We are telling the [Chinese] what's important to us and they are listening," a senior U.S. official in Beijing said after Geithner's meeting with Chinese officials. "We have a reasonable shot at getting a number of countries to wean themselves off Iranian oil."

But reports in Chinese state media Wednesday suggested Beijing was not willing to budge from its long-held opposition to sanctions.

"China's regular demand for energy does not have anything to do with the Iranian nuclear issue and should not be affected," said Liu Weimin, Foreign Ministry spokesman. "To place one country's domestic law above international law and press others to obey is not reasonable."

Meantime, China, the world's biggest energy consumer, is under greater pressure to ensure its energy supply for 2012.

Speaking at a national energy conference Tuesday, Liu Tienan, head of China's National Energy Administration, said the country is facing a "grim situation" in energy saving, noting "it is always worrisome to have to sustain supply of energy and resources for a country with 1.3 billion people," Xinhua reported.

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