Sunday, February 12, 2017

China's Loan for Oil Deals

Energy Research & Social Science published on 11 January 2017 an analysis titled "Financial and Energy Security Analysis of China's Loan-for-oil Deals" by Eugene Gholz, University of Texas, Umul Awan, World Bank, and Ehud Ronn, University of Texas. The full article can only be accessed by purchase or through a library subscription.

The authors discuss the "loan-for-oil" agreements in which Chinese state development banks lend billions of dollars to oil-producing countries at below-market rates in exchange for the producers' agreements to sell oil to Chinese oil companies at future market prices rather than at a fixed price. They conclude that only a few of the projects connected to loan-for-oil deals could ameliorate China's fear of future political-military supply interruptions. Among the deals looked at are those in Angola, Equatorial Guinea, and Ghana.

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