One country looms over Saudi Arabia’s current pump-till-it-slumps oil strategy: China. Resurgent U.S. oil output has raised global supply. But China has long been the gorilla on the demand side, accounting for 48% of the increase in global oil consumption in the past decade. Now China is slowing—and even that earlier, rapid growth wasn’t an unalloyed boon for oil producers. The explanation lies in the changing relationship between China’s economic growth and the oil needed to support that. Plotting the annual growth in China’s inflation-adjusted gross domestic product against its growth in oil demand, the points for the 1980s and 1990s are as expected: As GDP rose, so did oil demand in a broadly linear way. Things changed in the 21st century: China added almost as much absolute GDP in the five years through 2005 as in the previous decade. Oil consumption increased every year on average by about […]