Unipec, a Chinese oil trade, plans to resume importing U.S. crude oil by March following the agreement between President Xi Jinping and his American counterpart during the G-20 meeting. The agreement halted both sides from slapping tariffs on each other.
The presidents of the two largest economies agreed on a temporary truce this weekend. The truce is expected to prevent further escalation in the trade war. It is also expected to give hope to both industries with the two countries. The White House announced that China will immediately start importing U.S. products.
According to reports, Unipec plans to import U.S. oil starting March 1 after the 90-day negotiation period agreed upon by the two leader's ends. China's import of crude oil ended earlier this year after the tensions between the two countries escalated and the trade tariffs were imposed. Unipec is a trading arm of the state-owned refiner the Sinopec.
A senior executive officer in Sinopec claimed that Chinese imports who plans to purchase U.S. crude oil will rush their imports after the negotiating period. He added that the imported oil needs to reach the Chinese market before March. Sinopec and Unipec failed to comment on a specific trade deal.
He said that oil process is low and it makes economic sense to store some crude oil as commercial inventories.
The amount of import that the company will order is unclear, however, a source said that the company is projected to import a record volume of Crude oil in January. Data from the Chinese customs showed that in January 2018, China's oil import from the United States is estimated to reach 472,000 barrels per day (bpd).
China is the United States leading importer of crude oil before the trade tension escalated. The customs data also showed that the country's average importing the first nine months of 2018 is estimated around 325,000 bpd before dropping to zero in the month of October.
According to a source Unipec is on an agreement with VLCC Manifa to load U.S.oil this December and it is expected to load oil in January which will make a 45-50-day trip to China with an estimated cost of $8.4 million.
According to a Sinopec executive, they are unable to determine what will happen to oil import after March even though the trade tensions between the two big giants have eased. He added that the two sides are currently pressured to reach a win-win agreement in 90 days.
