• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 5 hours One Last Warning For The U.S. Shale Patch
  • 1 hour Modular Nuclear Reactors
  • 10 hours Once Upon A Time... North Korea Abruptly Withdraws Staff From Liaison Office
  • 35 mins Oil Slips Further From 2019 Highs On Trade Worries
  • 10 hours Chile Tests Floating Solar Farm
  • 38 mins Poll: Will Renewables Save the World?
  • 1 day China's E-Buses Killing Diesel Demand
  • 1 day Trump sells out his base to please Wallstreet and Oil industry
  • 21 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 32 mins Read: OPEC THREATENED TO KILL US SHALE
  • 2 days Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 1 day Trump Tariffs On China Working
  • 1 day Biomass, Ethanol No Longer Green
  • 20 hours New Rebate For EVs in Canada
Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Trending Discussions

A New Booming Market For U.S. Crude Exports

The VLCC Tianjin left the Corpus Christi lightering zone in the Gulf of Mexico on June 19 with nearly 2.1 million barrels of US WTI / Midland WTI crude on board. It has just discharged its cargo at Reliance's Jamnagar refinery in India, sneaking in before the end of the July to mark a record month of deliveries of US barrels to India.



Despite this milestone, China continues to hold the mantle as the leading Asian destination for US crude. But that could change going forward, with the growing likelihood of impending tariffs.

Based on our projections, India is going to import nearly as much US crude as China in August, as its appetite for light sweet US crude increases...just as China loses theirs.

Tariffs look set to kick in as soon as September, meaning that any barrels arriving on Chinese shores will be hit with a 25 percent tariff - taking US crude from a ~$4/bbl discount versus global benchmarks to a premium of ~$13.50/bbl.

These unfavorable economics will slam the door shut on the US-China arbitrage. Given the 8-week journey time for US crude to China, this is why companies such as Unipec are already reducing their purchases.

Related: Russia’s High Risk Global Oil Strategy

As for India, things look decidedly more rosy. According to ClipperData projections, Indian receipts of US crude in August should be close to China's current pace of ~250,000 bpd. As US barrels look for a new home in Asia, India seems an ideal destination. We could even see light sweet Nigerian barrels being displaced from India, and heading to China instead.

While it is highly unlikely that India will absorb China's share of US crude - which averaged 330,000 bpd through the first half of the year - we could see other East Asian destinations such as Taiwan and South Korea also picking up some of the slack.

At the same time, the narrowing of WTI versus other global benchmarks in the last five weeks or so may be closing the window on higher exports going forward - something the latest weekly EIA data may be giving us a glimpse of already.

By Matt Smith

More Top Reads from Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News