Chinese imports of U.S. oil to pick up following Trump’s trade deal

Category : News

By Catherine Ngai on 1/15/2020

NEW YORK (Bloomberg) – American crude oil shipments to China are poised to pick up again after the two economic superpowers signed a landmark trade deal.

Under the terms of the agreement, U.S. energy exports to China will jump over the next two years, with the promise of an additional $18.5 billion worth of additional purchases in 2020 and $33.9 billion in 2021.

U.S. oil exports to China, which had been surging through July 2018, slumped as trade tensions between the two nations escalated. Since then, China has cut back imports, skipping crude purchases form the U.S. altogether in six of the months, according to U.S. Census Bureau data. The Asian nation imposed a 5% tariff on U.S. oil from September, making it less economical for refiners to bring in American supply.

It’s not clear exactly how many more barrels of crude that means, as the additional buying will also include liquefied natural gas, refined products such as propane, butane, naphtha and petroleum coke, and coal.

Despite losing one of its top customers, U.S. oil exports have remained steady as countries including the U.K. and South Korea took more. Late last year, U.S. exports even touched a record 4.5 million barrels a day.

While China has tapered off its imports of American crude, the Asian nation hasn’t moved away from its dependence on foreign oil. China imported 10.16 million barrels a day of crude last year, according to customs figures released Tuesday, topping the 10.12 million the U.S. bought at its importing peak in 2005.