"China's oil imports have increased dramatically during the past five years; the country now imports 3.5 million barrels a day, compared with U.S. daily imports of 12.2 million barrels. But it's far less obvious that Americans are really paying a price for this...China is making scads of plastic...by embedding oil in products, China is, in effect, importing oil on behalf of U.S. consumers -- as much as 1 million barrels per day...Chinese pressure on oil imports may have raised U.S. inflation by 0.23 percent from 2001 to 2005, but cheap imports of Chinese goods decreased U.S. inflation over that same period by 0.28 percent"...My thought on this is that this is an excellent and unexpected insight. One point that I would add is that if production of plastic-based products had not been outsourced to China, the store price of these products would be at some higher level and therefore the demand somewhat less, leading to some reduced level of net oil consumption.
However, I believe that some significant part of today's crude oil prices is due to political/production fear factors and not due to the actual supply levels. I have been tracking US crude oil inventories as reported by the US EIA's This Week in Petroleum website at this blog and those inventories have been at the top of their historical ranges for at least a year. One would expect that imports would decrease to at least bring inventories down to the middle range as refiners are maxed out on refining capacity and therefore wouldn't need to import crude until their crude inventories dropped quite a bit.
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