China Rejects US Oil and will Stop Buying it in 2019

China, the world’s largest importer of oil, will begin the year 2019 buying little or nothing from US crude, despite the declared truce in the tense commercial relations between both countries.

At least so predicted by a recent Reuters analysis based on the commercial dynamics of recent months, according to the Sputnik agency published on its website in Spanish.

The analysis suggests that the US will maintain a very small or no presence in the Chinese energy market.

China completely stopped imports of US oil in the months of October and November. It resumed some imports in December, but only for 1 million barrels, a tiny portion of the more than 300 million barrels of total imports.

“Chinese companies have little incentive to buy US crude because of the high availability of crude supplies from Iran and Russia currently,” the agency quoted Seng Yick Tee, an analyst at the Beijing-based SIA Energy consultancy.

Reuters reports, citing data from the market research agency Refinitiv, which in 2018 the US ends up leading the list of oil producing countries, although it warns that this trend is mainly due to the rise in the production of shale (artificial production that damages the environment), which reached record levels this year.

The trade deficit of Washington with Beijing also reached a record of 43,000 million dollars at the end of October. This figure is equal to the annual GDP of countries such as Lithuania or Slovenia, only in one month. Combating this imbalance has been one of the main tasks proposed by US President Donald Trump and the trade war with China should reverse this trend.

But now, it is unlikely that the US can use crude purchases to help close that gap, stresses the analysis.

Despite the impasse in purchases of US crude, China’s total crude oil imports could surpass a record 45 million tonnes (10.6 million barrels per day) in December, says Mark Tay, oil analyst at Refinitiv.

Russia is expected to remain China’s largest supplier with 7 million tonnes in December, followed by Saudi Arabia with 5.7-6.7 million tonnes, the expert calculates.

In addition, Chinese imports of Iranian oil could recover in December after two state-owned refineries began using the US sanctions exemption to Tehran.

Source URL: VTV

Translated by JRE