This website uses cookies as well as similar tools and technologies to understand visitors’ experiences. By continuing to use this website, you consent to Columbia University’s usage of cookies and similar technologies, in accordance with the Columbia University Website Cookie Notice.
Energy Explained
Get the latest as our experts share their insights on global energy policy.
The Future of LNG Trade: Inflexible, Inefficient, and Polarized?
This Energy Explained post represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece...
Podcasts
Hear in-depth conversations with the world’s top energy and climate leaders from government, business, academia, and civil society.
The Nexus of Climate Policy and National Security
As President Biden’s national security advisor, Jake Sullivan laid out a strategy for what he called a “foreign policy for the middle class.” Using the metaphor of a...
Events
Find out more about our upcoming and past events.
April 29, 2025
• 4:00 pm - 5:00 pm
edt
Stabilizing Your Career in a Rapidly Changing Industry
Please join the Women in Energy initiative at the Center on Global Energy Policy at Columbia SIPA for a public roundtable featuring Claire Steichen, Founder of Clear Strategy Coaching. The fast-evolving energy...
Event
• Online
Fellow Erica Downs examines the history of China’s independent “teapot” refining sector, which has had a significant impact on oil markets since Beijing’s decision in 2015 to allow these refineries to import crude oil through a system of import quotas and licenses. The unique study, which draws on both external and local sources, including Chinese-language media reports, explores the teapots’ transformation over the past three years, their impact on domestic and international energy markets, and the outlook for their future. In short, the paper finds:
- Beijing’s decision in 2015 to award China’s independent refineries crude oil import quotas and licenses has transformed the world oil market. By the end of 2016, “teapots” held nearly 1.5 million barrels per day of oil, equivalent to the net crude oil imports of Spain in 2014, adding to China’s already significant market power as the world’s second largest importer.
- While the central government’s policy towards the independent refineries will continue to evolve, Beijing is unlikely to reverse its decision to allow qualified teapots direct access to crude imports. Empowering these refiners helps the government achieve goals such as consolidating the independent refining sector, pressuring the national oil companies to become more efficient, and pushing broader oil industry reform.
- Other repercussions are redefining global trade. Since they started receiving import quotas, Russia displaced Saudi Arabia as China’s largest crude supplier on an annual basis in 2016, and other suppliers such as Angola and Brazil are gaining ground in the coveted market.
- As larger refineries with greater access to imported crude thrive, smaller plants with less or no access will likely end up being acquired by stronger firms. Already there have been at least three mergers involving independent refineries in the first half of 2017.
- Further consolidation pressure may come as “teapots” work to meet the China V fuel quality standard to reduce air pollution from vehicle emissions. Instituted in January 2017, this regulation will be challenging for smaller refiners which lack the technology and funds to make fuels that meet the government’s limit for sulfur content.
- Independent refineries are likely to remain opportunistic crude buyers as higher crude prices and greater government scrutiny of their tax payments and operations put pressure on their margins.
Relevant
Publications
The Impact of the New US Oil Tariffs on Venezuela
This Energy Explained post represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece...
A More Corrupt World Will Be Bad for America
Trump’s abandonment of antibribery efforts will hurt—not help—U.S. companies.
Energy Issues Likely to Top the Modi-Trump Meeting Agenda
This Energy Explained post represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece...
