China’s Sinopec Suspends US Crude Oil Imports

Unipec had planned to trade up to 300,000 bpd of US crude oil by the end of 2018.Unipec had planned to trade up to 300,000 bpd of US crude oil by the end of 2018.

Due to the rising trade tension between China and the United States, the trading arm of Chinese state oil major Sinopec has suspended imports of crude oil from the United States, Reuters reported on Friday, citing sources familiar with the plans.

Sinopec’s trading unit, Unipec, has not booked new purchases of US crude oil at least until October. Yet it was not immediately clear how long the suspension of US oil imports would last, Oil Price reported.

Earlier this year, Unipec had planned to trade up to 300,000 bpd of US crude oil by the end of 2018, which would have been triple the volume of US crude oil that it traded last year.

Amid the ongoing trade war between the United States and China, however, Chinese buyers have scaled down purchases of American oil after China threatened to impose a 25% import tax on US energy imports if the United States imposed additional tariffs on more Chinese products.

US energy exports to China may suffer if Beijing follows through with its threat to slap tariffs on US oil and oil product imports.

China has, in recent years, become a key export market for growing US energy exports. In fact, China is America’s second-largest crude oil customer after Canada. Chinese imports of US crude oil in May, for example, averaged 427,000 bpd, more than any other destination and surpassing Canada’s 289,000 bpd imports, EIA data shows.

The possible Chinese import tariff, which would slap nearly $18 a barrel to crude priced at $70 per barrel, has deterred other Chinese companies, including PetroChina, state-run Zhenhua Oil, and independent refiners from importing US crude, Reuters’ sources say.

According to trade flow data by Thomson Reuters Eikon, Chinese imports of US crude oil averaged 334,880 bpd between January and August this year. Yet, only three supertankers are currently sailing to China, carrying a total of just 197,515 bpd of US oil to arrive in September, the trade flow data showed.

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