BEIJING, Aug. 4 — For all the noise about Western efforts to diversify supply chains and curb strategic dependencies, China’s command of global commodity markets remains firmly in state hands. The machinery runs through a cluster of state-owned enterprises, and at the front of the queue is China National Petroleum Corporation.
The Big Three
CNPC sits at the head of a trio that dominates Chinese hydrocarbons: CNPC itself, Sinopec Group and China National Offshore Oil Corporation, collectively known in the trade as the “Big Three.” Their combined reach, and the strategic purpose behind it, is the salient point for anyone watching global energy flows.
CNPC is not only China’s largest oil and gas producer but a genuinely global investor, with assets and operations in more than 30 countries across Africa, Central Asia and South America. The 2023 production figures give a sense of the scale involved: approximately 4.2 million barrels of crude oil per day, with natural gas output exceeding 150 billion cubic metres. These are numbers that most national oil companies, let alone private producers, can only regard with envy.
Sinopec operates at a different point in the hydrocarbon chain, but on an even larger industrial canvas. It is the world’s largest refiner, processing more than 250 million metric tons of crude oil in 2023 — a throughput that goes a long way toward explaining how China keeps its vast fuel appetite supplied. CNOOC, the third member of the group, specialises in offshore exploration and production, and makes its own quietly important contribution to domestic energy security.
For all the transition talk emanating from Beijing, these remain decidedly hydrocarbon-shaped businesses.
Beyond hydrocarbons
The state’s commodity footprint extends well past oil and gas. China Baowu Steel Group is the world’s largest steel producer, with annual crude steel output exceeding 130 million metric tons in 2023. That scale carries consequences far beyond China’s own borders: Baowu’s purchasing decisions are heavy enough to move global iron ore and coking coal prices, which makes it a force to be reckoned with in any calculation of industrial raw material markets.
China Minmetals Corporation, a major player in metals and minerals, rounds out the picture on the mining side. Together with Baowu, it gives Beijing a second, non-hydrocarbon lever over global supply dynamics.
Strategy, not merely commerce
What distinguishes these companies from their private-sector Western counterparts is the mandate behind them. The SOEs operate under the strategic guidance of the Chinese government, executing national energy security and economic development objectives rather than purely commercial ones. Their vast financial resources and global reach allow them to undertake large-scale, long-term projects of a kind that would test the patience of most shareholder-driven boards — the Power of Siberia pipeline being the most obvious recent example of a commitment measured in decades, not quarterly reports.
That combination of patient capital and state direction enables China to secure critical resources and, in doing so, to shape global supply-demand dynamics in ways that go well beyond what market forces alone would dictate.
The question for the rest of the world, as these companies extend their reach, is not whether Beijing will keep using them. It is how much of the global commodity arena it intends to anchor — and which Western industries will be left to compete on those terms.
Sources
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