Escalation of trade tensions between the US and China is likely to further dampen US crude flows to China, at time when China was seen stepping back into the US market following a cooling-off period. Although crude oil imports are not included in the latest round of China’s tariff increases to US goods announced on May 13, the heightened tensions between the two countries has been enough to put the brakes on oil trade. “China will be wary of buying US cargoes because it could be added at any moment and they would be left holding the baby,” said Sandy Fielden, director of oil and products research at Morningstar Commodities. Despite an anticipated decrease in buying from China, Fielden said he does not expect to see total US crude exports to decrease all that much. Fielden said China went from being the biggest foreign buyer of US crude by mid-2018, to halting all of its purchases of US crude in the latter quarters of the year as US and China began imposing increased tariffs on each other. China halted buying US crude in August last year, after taking a record 27 million barrels in June and July. Purchases picked up… continue reading
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Source: CTRM Center