Three U.S. crude oil cargoes are on the way to China which marked the first Chinese import of American crude since the trade war escalated and since the three months truce was agreed in December. The news was reported by Reuters on Tuesday based on information given by shipbrokers and tanker-tracking data.
U.S. crude oil is not listed among the products with imposed tariffs. Despite, Chinese buyers are reluctant in purchasing the product ever since the trade war escalated last year. EIA released a data which showed that there was no export of U.S. crude oil to China since August, September, and October. Chinese import in July is 384,000 bed and it reached its highest of 510,000 bpd in June, the months prior to the escalation of the trade conflict.
The two nations agreed on a trade truce on December and both have pledged to immediately convene to negotiate possible deals between them. According to reports, Chinese refineries have started to look for opportunities to import U.S. crude oil when the negotiating period ends until March 1.
According to Reuters' sources and the data released by the Refinitiv Eikon vessel, three cargoes from Galveston, Texas in December are currently shipped to China. One of the tankers is expected to arrive in China before the end of January and the other two is scheduled to arrive in February or March.
The demand for U.S. crude in China continued to weaken based on cargo loading plans of Chinese refiners as of mid-December despite the trade-war. According to the report of Reuters last month, buyers will mainly consider the rising freight costs for U.S. crude and the result of U.S.-China trade negotiations.
Unipec, a Chinese Sinopec's trading arm, and China's biggest U.S. crude oil buyer are planning to resume importing from the United States momentarily. The company is planning to purchase a significant volume of U.S. crude oil.
When China halted purchasing U.S. crude oil since summer, the U.S. increased its export to other destinations. The data of the EIA showed that America's crude oil exports in October reached a record high of 2.326 million bpd.
Reuters reported that U.S. crude oil prices increased by around 3 percent Tuesday. It is greatly affected by China's plan to impose policies that will stabilize its slowing economy. China's National Development and Reform Commission announced that they will support U.S. crude oil by rolling out more fiscal stimulus.
