Asia Looks Seaward

CHAPTER 6

ANOILARMADA?THECOMMERCIAL AND

STRATEGIC SIGNIFICANCE OF CHINA’S

GROWING TANKER FLEET

Gabriel Collins

...once oil imports exceed [1.5 million barrels per day], it becomes necessary

to use economic, diplomatic, and military means to secure the safety of one’s oil

supply.^1

The energy shipping business is globalized to the hilt. It is not uncommon to
find, say, a Norwegian ship owner whose company is registered in the Bahamas
running a Panamanian-flagged tanker with an Indian captain and a Ukrainian
and Filipino crew, carrying Saudi oil to buyers in Singapore and China.
The oil shipping business lies at the intersection of commerce and the
high politics of oil security. Unlike wheat or iron ore, oil is a highly political
commodity. Oil’s inherently strategic character imparts a strong national security
flavor to many actions that in other sectors would be considered purely commer-
cial. In the case of the PRC (People’s Republic of China), it is at first glance tough
to ascertain the country’s ‘‘real’’ reasons for wanting a large domestic oil tanker
fleet. Some believe it is so China can ‘‘ensure’’ the security of its oil imports.
Others are convinced that the security issues are window dressing and that
Chinese tanker operators are content to manipulate the government’s oil insecu-
rity for commercial gain.
In this author’s view, the buildup is driven primarily by commercial factors.
However, the geopolitical implications of China’s growing maritime trade (which
could reach $1 trillion per year by 2020) and its growing oil demand (which
could reach 12 million barrels per day by 2020) necessitate a close look at the
factors behind China’s desire to increase its presence in the world tanker market.