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Oil Market: China

Volume 670: debated on Wednesday 16 March 2005

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asked Her Majesty's Government:What effect they foresee on (a) the availability of oil in the market, and (b) fuel prices, from the reported large-scale acquisition by China of oilfields and oil concessions from, among other countries, Kazakhstan, Nigeria, Angola and Brazil. [HL1701]

There are a wide range of factors that will influence future developments in the oil market. Growth in China's demand for oil is one, and has been factored into current oil price levels as well as the future production capacity plans of the major oil producers. Although China has concluded a number of deals in recent years in oil-producing countries it is unlikely that the additional effect these deals will have on the availability and price of oil will be significant in the short and medium term. The oil market is a global market involving a large number of producers and consumers. Moreover, oil production from these fields and concessions will be used to meet China's growing oil import needs, as well as global oil demand more generally.However, we will continue to monior market developments and promote the development of competitive and liquid global oil markets as the most effective way to help deliver more stable prices and for any time.