• 3 minutes The GREAT OPEC+ Agreement
  • 6 minutes US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 10 minutes Trumps Oil Industry....
  • 13 mintues Why Trump Is Right to Re-Open the Economy
  • 10 mins "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 10 hours A small trial finds that hydroxychloroquine is not effective for treating coronavirus
  • 4 hours Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 7 hours Trump will be holding back funds that were going to W.H.O. Good move
  • 5 hours Did you all forget the "drill baby drill" republican motto and trump calling for ramping up oil production a cpl years ago ?
  • 11 hours Chinese Communist Party
  • 5 hours Bernie Sanders introduces bill to ban fracking
  • 21 hours Saudi Arabia Is Buying Up European Oil Majors
  • 19 mins China to face backlash. Japanese government to fund moving Japanese mfg companies out of China. Is this the beginning ?
  • 16 hours Corona Price Tag
  • 20 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 8 hours Saudis ship 13 mm bbls oil to U.S. to hurt U.S. shale. On its way. . . . . . . AND TRUMP DOES NOTHING. .
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

China Willing To Pay More For Crude As Trade War Bites

China’s imposition of tariffs on U.S. crude oil signals its willingness to suffer more pain in the trade war than analysts may have expected. That’s according to a Bank of America analyst who spoke to CNBC.

“They’re hurting themselves on the domestic front by making it more difficult for domestic refineries to make money. They’re hurting themselves on the international front by making their refineries less competitive,” said BofA’s head of commodities and derivatives research, Francisco Blanch.

Blanch's remarks refer to wide expectations for greater demand for light sweet crude, which is the primary sort of crude the United States produces and exports. These expectations are related to the new sulphur emissions rules the International maritime Organization will put into effect from next January.

According to Blanch, the new IMO rules will “create a pretty big premium on light sweet grades which are mostly coming out of the U.S. these days.” 

A quick check with actual figures, however, reveals that the United States is not even in the top five suppliers to China. As of end-2018, Russia was the largest one, followed by Saudi Arabia—which this year has overtaken Russia as number one—Angola, Iraq, and Oman. The situation has changed this year, and not for the better for U.S. producers: Chinese buyers have been keeping their intake of U.S. oil to a minimum as the trade war continues.

Indeed, Blanch acknowledges that China is not a huge buyer of U.S. crude right now, with the average for the first half of the year at 120,000 bpd, most of which shipped during the first quarter, before the trade talks situation deteriorated.

He offered a parallel with soy beans: because of the tariffs, China switched from U.S. to Brazilian—and also Russian—soy beans, with the Brazilian commodity more expensive than the U.S. equivalent.

“We are skeptical that this is going to get resolved,” the analyst said. “And part of it is that China’s pain threshold is high.”

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




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