In order to complete the procurement target of the first phase of the Sino-US trade agreement, China is purchasing a large amount of US crude oil. PetroChina and Sinopec have booked at least 10 VLCCs to import US crude oil in the next two months.
According to Reuters, after a long period of After the trade war, China and the United States are preparing to review the first phase of the trade agreement signed in January. Chinese state-owned oil companies have booked tankers to transport at least 20 million barrels of U.S. crude in August and September, according to separate sources from U.S. traders, shipbrokers and Chinese importers.
China has become the largest buyer of U.S. crude oil, purchasing crude oil worth US$5.42 billion in 2018. Since then, as trade relations between China and the United States have become tense, crude oil trade has almost come to a standstill. In January this year, China and the United States signed the first phase of the trade agreement. China promised to purchase US$18.5 billion worth of US energy products, including crude oil and natural gas, on top of its 2017 imports. This means that the total value of imported energy products this year will reach approximately $25 billion.
According to official data from the U.S. Bureau of Statistics, as of June 30, China had purchased only $2.06 billion in U.S. crude oil this year, reflecting the economic downturn caused by the new coronavirus epidemic. and the limited impact of the epidemic on the first phase agreement. However, people familiar with the matter revealed that PetroChina and Sinopec have increased their purchases significantly recently. Data from financial market data provider Refinitiv shows that China will import 32 million barrels of crude oil from the United States in August this year, breaking a single-month record.
While current oil prices in other parts of the world may be more favorable to buyers, China’s bookings for U.S. oil tankers have risen sharply, with PetroChina and Sinopec each booking 5 tankers, people familiar with the matter said. Up to 6 VLCCs are planned to be shipped in August and September. U.S. crude oil exporters Occidental Petroleum, Equinor and Vitol have all chartered one to two oil tankers.
These people familiar with the matter revealed that PetroChina plans to purchase 3 million tons (about 22 million barrels) of crude oil from the United States by the end of the year, worth nearly US$1 billion. Crude oil analysts at Refinitiv said PetroChina has so far ordered about 10 million barrels of crude oil from the United States to be loaded in August and September.
People familiar with the matter believe that these new transactions are intended to show that China remains committed to achieving its agreed procurement goals. One trader said: “This must be for political reasons because a lot of crude oil supplies to Asia are priced below West Texas Intermediate (the U.S. benchmark).”</p
