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Chinese Unipec, the trading arm of state oil giant Sinopec, will this week receive the first cargo of U.S. crude since shipments were suspended last September, Reuters reports, citing a source in the know that wished to remain unnamed.
Reuters data shows that the load is carrying 2 million barrels of West Texas Intermediate (WTI), and is currently waiting at the port of Qingdao to unload its cargo.
The suspension of oil shipments to China resulted from the heat-up in trade talks between Washington and Beijing. Now that the two are at an advanced state in the negotiations with U.S. officials optimistic about a deal, things may be changing.
It’s interesting to note that the Reuters report comes on the heels of other reports concerning the removal of Iran sanction waivers by the U.S. administration. The latest update has it that China, along with Turkey, has openly defied the removal of waivers and will continue to import Iranian crude. This will certainly have reverberations at the trade negotiations table.
On Monday, shortly after the announcement of the waiver removal, the Chinese Foreign Ministry issued a statement that said, "China opposes the unilateral sanctions and so-called 'long-arm jurisdictions' imposed by the U.S. Our cooperation with Iran is open, transparent, lawful and legitimate, thus it should be respected." The statement also added "is committed to upholding the legitimate rights and interests of Chinese companies and will play a positive and constructive role in upholding the stability of global energy market."
This difference in positions, to put it mildly, on Iran, suggests that things are yet to get more interesting, especially after Iran renewed its regular threat that it would close the Strait of Hormuz if it cannot use it to ship its oil abroad. It also suggests that the trade deal between Washington and Beijing may not be so quick in coming.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.