On May 28, 2016 (April 22, 2016 lunar calendar), China surpassed the United States to become the world's largest crude oil importer. China surpassed the United States to become the world's largest crude oil importer. In the past few days, a picture of super tankers crowded on the coast of Singapore has become popular. Many analysts have used this to prove that China is constantly taking advantage of the opportunity window of low international oil prices to open up its stockpile of crude oil. As early as April, the backlog of super tankers at the gate of Qingdao Port also attracted media attention. And Reuters also vowed that because the drop in oil prices has seriously hit the economy of some oil-producing countries, these countries with loan contracts with China have to work hard to repay China's debts with more times the amount of crude oil. According to the data of the General Administration of Customs, China's crude oil imports in April were about 7.37 million barrels per day, surpassing 7.20 million barrels per day in the same period in the United States, temporarily becoming the world's largest crude oil importer. So combined with this, it feels that China, which is "rich", is "sweeping up goods" all over the world and making money by relying on the "loan-for-oil" strategy. But this picture alone can explain everything? It's not that simple. Brother, do you want oil? Obviously, the world crude oil market is also affected by supply and demand. In the ten years from 2004 to 2014, international crude oil prices rose all the way, and from the beginning of 2011 to August 2014, they remained at a very high price near $100 per barrel. Although the cost of crude oil extraction varies from place to place, the lowest is Saudi Arabia, where the cost of extraction is only $5, and the highest country, where the cost price is about $30. Dear, $5 sells for $100, which is 20 times the profit! Therefore, the global oil and gas industry has attracted a lot of investment. Saudi Arabia, Iran, Iraq and other traditional oil producers in the OPEC organization are ramping up their production capacity, and rising stars in Africa such as Chad, Niger, and Sudan are not far behind. The United States, on the other hand, has used its own financial and technological advantages to give birth to the "shale revolution" and has become the world's largest producer of oil and gas. For a time, conventional oil production capacity has steadily increased, and unconventional shale oil, deep-sea oil, oil sands, and ultra-heavy oil projects have appeared one after another. The result of the increase in production is naturally that the total global crude oil supply exceeded 98 million barrels per day in 2015. But how can the world's oil consumption have such a big appetite? Over the past decade or so, the growth rate of crude oil demand has been lower than the growth rate of supply. Developed countries such as the United States and Europe continue to improve energy efficiency, and the dependence of economic growth on crude oil is weakening. To make matters worse, after the 2008 international financial crisis, the world economy grew sluggishly, and China, the "engine of the world economy" of the previous decade, entered a new normal. Therefore, the growth rate of crude oil demand in the whole world has slowed down. In fact, the total global crude oil demand was actually only 96 million barrels per day in 2015. The total supply exceeded the total demand by more than 2 million barrels per day, accounting for about 3% of the global total supply. In Chinese terms, the world's oil industry is also "overcapacity" and is facing pressure to "reduce capacity". Therefore, in August 2014, international oil prices fell off a cliff, falling by more than 70% at one point, and there was a lot of grief for a while. However, due to the long investment cycle of oil development projects and the low marginal cost of crude oil production, the global oversupply phenomenon has not been alleviated in the 20 months of falling international oil prices. The accumulation of excess crude oil has caused the current global onshore oil storage capacity to be close to the limit. Oil-producing countries and traders have to reduce the speed of oil tankers, let crude oil "stay a little longer" in transit, and even simply let the tankers dock at sea as floating storage depots. That's why there are so many slow-moving green dots (moving oil tankers) and static red dots (moored oil tankers) at sea. So, big brother, do you want oil? The battle for the Asian market. Of course, vicious competition does not only come from conventional crude oil producers. Thanks to the "shale gas revolution", a large number of "independent oil and gas companies" in the United States (small and medium-sized enterprises, much smaller than "international crude oil companies" such as Mobil and Chevron, but more flexible in terms of business strategy and exploration and development) rely on horizontal drilling and hydraulic fracturing technology to continuously increase shale oil and gas production and reduce production costs. In the competition with conventional oil producers, these independent American companies are not at a disadvantage. All parties have gradually realized that the floor of international oil prices will be determined by OPEC countries, the ceiling of international oil prices will be determined by US shale oil producers, and the "floor" determined by OPEC can no longer be lower. American independent companies are still relying on cost control measures to continuously lower the "ceiling". So, this good day of lying down and counting money is over. What to do? Difficulties are approaching - Saudi Arabia first proposed to give up the "price guarantee" policy and instead implement the "share guarantee" strategy. According to market demand, on the one hand, production is at full capacity, and on the other hand, it competes with US shale oil and even members of the OPEC organization for market share. Iraq, which has just emerged from the war, is not to be outdone, overcoming various difficulties to rapidly increase production capacity and continuously set new production and export records. Iran, on the other hand, has been desperately promoting its previously accumulated inventories after the lifting of sanctions. With the European market close to saturation, the Asian market, which still maintains a rapid growth rate, has become the focus of competition among the world's major oil producers. With discounts and conditions met, the previously bullish oil-producing country bosses are getting lower and lower in front of customers in China, Japan, South Korea and India. Russia, on the other hand, is trying to operate the East Asian market by taking advantage of the geographical advantage of close water and the resource advantage of good crude oil quality. The local refinery in China's Shandong Province especially favors Russian crude oil. Taking advantage of the low oil price to import crude oil and export refined oil, China's crude oil imports from Russia increased by 52% in April this year compared with the same period last year. This is why the oil tankers outside Qingdao Port are densely packed. Low oil prices make the refining and chemical industry the most profitable period. Both large state-owned and small local refineries are importing cheap crude oil, producing at full capacity, and exporting refined oil products to generate income. At the same time, China is taking advantage of low oil prices to continuously strengthen crude oil reserves. These two points are why in April this year, China's apparent crude oil demand (domestic production, imports-exports) increased by only 1.4%, but imports increased by 7.6%, making it the world's largest crude oil importer. Loan for oil is back to "loan for oil". This policy has actually been carried out in China for many years. It is that I lend you money, support your development, and you pay off the loan with oil or the profits from joint oil operations between the two parties. This capital operation method has actually been used by many Western companies for a long time. The autonomous governments of Nigeria, Iraq, and Kurdistan have also borrowed from Western oil companies - such as Exxon, Dutch Shell, and Russian oil giant Lukoil - as well as oil trading companies - such as Vitol and Trafigura - and promised to repay them with oil. But many poor oil-producing countries are in danger of being "swallowed" by debt. You think, the domestic industry is dominated by oil. Now that oil prices are not as high as in the past, the pressure to repay debts is naturally high, and they can only produce at full capacity. This year, Angola, Nigeria, Iraq, Venezuela, and Kurdistan will have to repay $3 billion to $5 billion worth of oil, according to Reuters data. When the oil price was $120 per barrel, if you want to pay back $5 billion, you only need to produce a little more than 1 million barrels per day. Today, when the oil price is around $40, it requires more than 3 million barrels. Therefore, indebted countries like Venezuela, Angola, Iraq, and Nigeria naturally call on OPEC to reduce crude oil production uniformly so that oil prices can go up. But the "local tyrant" Saudi Arabia, because it has no foreign debt, continues to push up production and occupy the market. OPEC is limited to division. For China, this happens to be a rare opportunity. Even major oil producers like Iran and Iraq are trying to introduce Chinese loans, which will be an important opportunity for China to control the global market. In addition, China also has political considerations, using loans to make more countries become closer and more reliable friends of China. Of course, the energy finance cooperation between China and some countries is not simply bank loans and debt in kind, but the use of joint oil companies to establish a certain link between the loans of creditor countries and the oil revenue of debtor countries. For example, since 2013, Ecuador, the smallest member of OPEC, has been completely dependent on loans from China to maintain the capital flow of the national oil company. It can sell oil anywhere in the world, but the profits are shared with China.