The United States and European…
On Tuesday the International Energy…
Even if China slaps the planned 5-percent tariff on U.S. crude oil, total American crude sales to the Asian market will not be negatively impacted because other Asian countries have started to show increased appetite for U.S. grades that Chinese refiners wouldn’t want, S&P Global Platts says in an analysis.
On Friday, China and the United States traded tariff and counter-tariff announcements, with Beijing saying first that China would place tariffs on a range of U.S. products worth US$75 billion, including crude oil, in two batches starting on September 1 and on December 15.
The end of the truce in the U.S.-China trade war and the highly unpredictable nature of the next moves in the trade spat have made traders in China even more reluctant to buy U.S. crude oil despite its favorable economics, Chinese traders told S&P Global Platts earlier this month.
While Chinese customers are not touching spot cargoes and shying away from purchases of crude oil from the U.S., other nations in Asia have been growing their imports of American oil, more than offsetting the volumes that China would have bought from the U.S. in a no-trade-war scenario, according to data from authorities in China, India, Taiwan, and South Korea, compiled by S&P Global Platts.
South Korea has already increased its U.S. crude oil imports and some refiners have been testing U.S. grades they haven’t previously imported to see if they would be a good fit for their refineries, an official at a South Korean refinery told Platts.
In Southeast Asia, refiners could snap up cargoes from the U.S. that Chinese refiners or traders might want to resell.
In China, the largest refiner Sinopec is unlikely to buy much oil from the U.S. due to the tariff, a senior executive told Platts.
Earlier this week, reports emerged that Sinopec plans to apply for a tariff exemption with the Chinese government for its imports of U.S. crude oil. The Chinese refiner is also considering storing oil from the U.S. in bonded storage, such that hasn’t cleared customs in China yet, or sending it to other destinations.
By Tsvetana Paraskova for Oilprice.com
More Top Reads from Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.