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The international trading arm of China’s refining major Sinopec, Unipec, will resume U.S. crude oil purchases from October, three sources told Reuters on condition of anonymity. However, it remains unclear exactly how much oil Unipec will buy, how much of it the company will use at its refineries, and how much it will sell on to third parties.
The company had suspended crude oil imports from the United States amid the trade spat between Washington and Beijing in anticipation of crude oil making it onto the tariff list. When this did not happen, Unipec started buying U.S. crude again despite the trade dispute escalation that saw China slap 25-percent tariffs on U.S. oil products and coal.
Sinopec was among the most active lobbyists against tariffs on U.S. crude oil back in June when the topic was discussed by the government. It is also one of the biggest Chinese importers of U.S. crude. Total U.S. shipments to China in the period January-May this year hit 350,000 bpd, according to EIA data, more than United States producers exported to Canada.
There has been much speculation about whether China will at some point slap tariffs on U.S. oil if bilateral relations continue to deteriorate. U.S. oil shipments to China account for just 3 percent of the country’s total imports of the commodity. China, on the other hand, accounted for a fifth of U.S. crude exports in May, according to EIA export data. In other words, U.S. producers depend more on China for their exports than China depends on them for its imports, at least on the face of it.
However, as oil demand remains stable across the world, it would be easier for U.S. producers to find alternative buyers than it would be for Chinese refiners to find alternative suppliers should Beijing decide to add crude oil to its tariff list of U.S. products.
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.