The "high fever" of oil prices will not recede, and the global energy supply pattern is facing reconstruction

Two years ago, when the price of WTI (West Texas Light Crude Oil in the United States) fell below $10 (barrel, the same below), no one would have imagined that today, two years later, the hot oil price would cross the important thresholds such as $90, $100, $110 and approaching $
120.
A number of authoritative figures said in an interview with a reporter from Shanghai Securities News on the 3rd that the current "high fever" in oil prices is not only a problem left by geopolitical tensions, but also the result
of unlimited loose currencies in various countries in the early stage.
High oil prices are an overall reconstruction of the global energy supply pattern and supply chain arrangements, which will also have a certain impact
on China.
To this end, China should "grit its teeth" to develop new energy sources and strive to get rid of dependence on oil imports
.

Multiple reasons have pushed up crude oil prices

"There is no serious shortage of crude oil supply in the market, and the rise is still due to concerns about supply stability caused by the
Russia-Ukraine conflict.
" Zhou Dadi, former director of the Energy Research Institute of the National Development and Reform Commission and deputy head of the 14th Five-Year Plan Energy Planning Expert Committee, told reporters that high oil prices were first caused by
geopolitical conflicts.

On the other hand, he believes that the current round of oil price rise is not unrelated to the crazy printing and easing of money in Europe and the United States in the past two years
.
The over-issued money ends up in commodities
such as energy.

"The core reason for the surge in international oil prices is that the market is fully priced and Russian crude oil cannot enter the market circulation
.
This is the biggest trading logic
at the moment.
Zhang Longxing, director of the oil product division of Shanghai Oil and Gas Trading Center, told reporters that the progress of negotiations and reconciliation between Russia and Ukraine and how European and American countries lift sanctions will have a huge impact
on the trend of oil prices.

In Zhang Longxing's view, it is difficult for oil prices to fall immediately, and the reason is, first of all, strong fundamentals
.
After the price war in Saudi Arabia caused the price war to fall in oil prices, international oil companies have been investing in upstream for a long time, causing problems with the entire upstream production capacity
.
Second, OPEC's mobile production capacity is concentrated in the hands of Saudi Arabia and the United Arab Emirates, and the crude oil supply gap caused by sanctions against Russia needs to be filled by these two countries, but the current US administration has less influence on OPEC countries than before
.

"In the short term, the dilemma of the imbalance between oil and gas supply and demand may not be alleviated
.
" Chen Yi, chief economist and director of the research institute of Sichuan Finance Securities, believes that Russia is an important oil and gas exporter in the world and the largest natural gas supplier to the EU
.
According to 2021 data, the share of Russian oil and gas exports accounted for 11.
3% and 16.
2% of global exports, respectively; In Europe, Russian oil and gas account for 27% and 35% of EU imports, respectively, while more than 75% of oil comes from Russia in some European countries
.

In Chen's view, with the strong recovery of the global economy, crude oil demand still has upside, and the dilemma of tight supply is difficult to solve
in the short term.
Among them, in addition to sanctions and other factors, the limited short-term idle capacity is also an important reason
.

According to OPEC's January report, it expects global crude oil demand growth to be 4.
2 million barrels per day in 2022, and global oil consumption is expected to exceed 100 million barrels per day in the third quarter, while the world's
last consumption of 100 million barrels of oil per day was in 2019.

U.
S.
strategic oil reserves fell to a 20-year low

Another notable indicator is the Strategic Petroleum Reserve
.
Since the fourth quarter of last year, the United States has been releasing strategic oil reserves
.
The most recent was on March 1 this year, when it announced the release of 30 million barrels
.

At the same time, the International Energy Agency, which has 1.
5 billion barrels of emergency reserves in member countries, announced the release of 60 million barrels of crude oil (4% of emergency reserves).

This is the fourth coordinated release in the history of the IEA, established in 1974, after collective releases in 2011, 2005 and 1991
.

"The main reason is that the current oil price is rising too high and too fast, and the release of strategic reserves can be smoothed out in the short term
.
" In Chen Yi's view, this is really an emergency move, not a fundamental solution, and the effect will be diminished
.

According to Zhang Longxing's statistics, the US Strategic Petroleum Reserve may have released more than 100 million barrels so far, and it will eventually be released less and less
.
According to the data, its strategic oil inventories have fallen to their lowest level
since 2002.

"The release of oil reserves is a double-edged sword, on the one hand, it is a posture intended to curb oil prices; On the other hand, it is equivalent to telling the market that oil prices cannot fall in the short term
.
Zhou Dadi believes that the US strategic oil reserves may be more than 600 million barrels, and the release of tens of millions of barrels is not
even 10%.

"The reason for the current strong oil price is that there is a big problem
on the supply side.
" Zhang Longxing said that the supply side is inelastic, which is equivalent to breaking the balance
between supply and demand.
If Russian crude oil really cannot return to the market, the impact on the energy market will be very far-reaching, and it will reconstruct the energy supply pattern and supply chain arrangement as a whole, and will also cause the entire energy market to be reshuffled and shaped
.

As for the view that this round of high oil prices will trigger a global economic crisis like in 2008, Zhang Longxing believes that it is still debatable, "mainly depending on whether there is systemic risk
in large banks or financial institutions.
" ”

China is affected or less affected than Europe and the United States

What impact will the "high fever" of international oil prices have on China, which is still heavily dependent on imported crude oil?

"China's current dependence on foreign crude oil is still as high as 72%, and the rise in oil prices will push up import costs, and the rising costs may be transmitted to the terminal
through the industrial chain.
" From a global perspective, the proportion of crude oil in the energy structure of European and American countries is much higher than that of China, and the impact of high oil prices on European and American countries will be greater than that of China, pushing up their inflation levels
.
Lin Boqiang, director of the China Energy Policy Research Institute at Xiamen University, told
reporters.

According to data released by the China Petroleum and Chemical Industry Federation last month, China's crude oil imports in 2021 were 513 million tons, down 5.
3% year-on-year, the first decline; The external dependence of crude oil fell by 1.
6% from 73.
6%
in the previous year to 72%.

However, as Brent oil prices rose to a high of $119.
84 on the 3rd, they are getting closer
and closer to the $130 cap stipulated by the domestic refined oil pricing mechanism.

"China has the so-called 'ceiling price' and 'floor price' for oil prices, the former is $130 and the latter is $
40.
When reaching or approaching the 'ceiling price', many refineries are less motivated to refine because one ton of refining loses one ton
.
If the oil price really stays above $130 for a long time, it will bring a very big test
to the refinery.
Zhang Longxing said
.

On January 13, 2016, the National Development and Reform Commission announced that it decided to further improve the refined oil price mechanism
.
According to Article 6 of the current Measures for the Administration of Petroleum Prices, when the price of crude oil in the international market is higher than US$80 per barrel, the profit margin of processing shall be deducted until the price of
refined oil is calculated according to zero profit from processing.
When it is higher than US$130 per barrel (inclusive), appropriate fiscal and taxation policies are adopted to ensure the production and supply of refined oil, and the price of gasoline and diesel is not mentioned or reduced in principle
.

On the other hand, Zhang Longxing believes that imported inflation will also affect demand, bringing uncertainty
to economic expectations.

Lin Boqiang also said that the rise in oil prices will push up the raw material costs of downstream enterprises, which will have a big impact
on the refining, chemical industry, transportation logistics and other industries.

"When oil prices rise, China needs to spend more dollars to import crude oil, which also creates a certain economic burden
.
" Under this circumstance, China needs to 'grit its teeth' to accelerate the development of new energy, accelerate the process of vehicle electrification and transportation electrification, and reduce crude oil imports in 10 years or even less to get rid of import dependence
.
Zhou Da said
.