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World oil prices have experienced a period of sustained strong growth between year 2000 and 2008 before starting its rollercoaster ride in the last decade. Unlike the two oil price shocks in the 1970s, the long oil price hike to the peak in mid-2008 did not come hand-in-hand with major oil production disruptions. Commentaries often associated this oil price growth with various demand-side factors, including the “China factor”, which is echoed by evidence from the academic literature. Being an economic superpower with an economy that is primarily powered by fossil fuels, China is expected to be influential on fossil fuel demand and prices.
This seminar reviews China’s activities and involvement in the world oil market in recent decades. It also presents new empirical results on the influence of Chinese oil imports on the oil price.