More than five decades ago, a group of oil-producing countries came together to form the Organization of Petroleum Exporting Countries.
You know this five-member oil cartel as OPEC. The list of its charter members reads as a who’s who of global oil production today. The group controls about 40% of the world’s oil supply and nearly three-quarter of its proven reserves.
However, there’s another cartel of sorts that’s part of the equation…
The images directly associated with this unofficial group aren’t pretty. In fact, it’s a good bet you’ve seen some of them yourself — including long lines at gas stations whenever there’s a supply shortage.
They may not want to be a part of this group, but the fact is these countries have one major thing in common: They’re all major oil importers.
It’s time to meet the founding members of OPIC…
Meet OPIC
Together, they make up what I affectionately refer to as the Organization of Petroleum Importing Countries.
I have a feeling you won’t see these countries gathering for a conference like the one OPEC members held in Baghdad back in 1960. Make no mistake; this is a list no country wants to find itself on…
Nevertheless, it’s precisely where Uncle Sam has been for years.
Even after reducing our foreign oil imports by more than three million barrels per day since 2006, the ten million barrels of oil and petroleum products the U.S. imported last August is nearly double that of the second highest member of OPIC.
Fortunately, it won’t be so lonely at the top in a few years — not once China catches up to us…
Right now, the Middle Kingdom is buying oil at a rate of nearly six million barrels per day.
Within seven years, that amount is expected to swell to more than nine million barrels per day, thanks to the 160 million vehicles that will find themselves on China’s roads in 2020.
There is one major difference between these two importers: If we assume the rosy production estimates are correct, the tight oil boom will allow us to cut imports by several more million barrels per day.
On the flip side, nearly three of every four barrels China will consume in 2020 will come directly from its imports.
Not only does this fact ensure China will top OPIC’s list, but it’s safe to say they’ll be in the No. 1 slot for decades to come.
Now pay attention, because the profit opportunity in all of this isn’t necessarily in exploiting these countries’ gluttonous addiction to crude oil…
You see, by the time China sits atop the list of the world’s largest oil importers, it’s going to have another addiction to satisfy — and this one could potentially become more valuable than even black gold.
More Valuable Than Oil
What could possibly be more valuable than oil right now?
I’ll give you a hint: It burns much cleaner than both oil and coal.
I’m referring, of course, to natural gas.
I’ve said before that the transition to natural gas in China is a no-brainer, especially considering that almost 70% of its energy demand is met by coal.
This makes sense, because in order for China to make headway in its own war on smog, turning to natural gas has become their greatest asset.
What’s more, we’re seeing this transition take place before our very eyes.
But there’s a major snag in this runaway demand, as some of you might remember that China’s gas demand is quickly outpacing production…
The problem is that to secure its future gas supply, China is willing to pay a hefty premium — and that’s assuming they find a huge gas supplier.
As it turns out, they’re in luck…
And in fact, we too know this gas exporter. They’ve been supplying the United States with natural gas for more than a century now, starting with the first natural gas shipments flowing south from Ontario.
It’s no secret Canada has a wealth of natural gas in Alberta and British Columbia…
The Montney Formation alone holds 449 trillion cubic feet of marketable natural gas. And we can add to that another 94 trillion cubic feet from the Horn River Basin.
You can bet China will be willing to buy it all.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
