Chinese Imports Of US Crude Have “Totally Stopped” As Tariff Threats Persist

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Originally appeared at ZeroHedge

It has been roughly two months since China threatened to impose a 25% tariff on US energy imports (it eventually went back on those threats), and less than two weeks since the latest round of tariffs has been implemented. But even as China has shied away from its threats to punish the US energy industry, Reuters data are showing that imports of US oil to China have ground to a halt.

Chinese Imports Of US Crude Have "Totally Stopped" As Tariff Threats Persist

Confirming the data, Xie Chunlin, the president of China Merchants Energy Shipping Co, said on Wednesday that crude oil shipments to China have “totally stopped” as the trade war has taken its toll, reversing growth in what had been a rapidly expanding market for US shale producers.

“We are one of the major carriers for crude oil from the U.S. to China. Before (the trade war) we had a nice business, but now it’s totally stopped,” Chunlin said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong.

“It’s unfortunately happened, the trade war between the U.S. and China. Surely for the shipping business, it’s not good,” the CMES president said.

He also said the trade dispute was forcing China to seek soybeans from suppliers other than the United States, adding that China now bought most its soybeans from South America.

In place of US imports, China, which is the world’s largest importer of crude oil, is becoming increasingly reliant on the Middle East and Russia while it has also shifted to using Iranian tankers to bypass impending US sanctions on Iranian crude while also becoming more reliant on Iranian crude in general. But while it’s grabbing the most headlines right now, the trade fight is hardly the only source of contention between US oil producers and China, as China’s yuan-denominated crude futures contracts are beginning to show their teeth.

To be sure, China was never heavily reliant on the US as a source of crude oil. During 2017, Russia and Saudi Arabia were the two biggest suppliers of crude sent to Chinese refineries (data courtesy of World’s Top Exports).

  • Russia: US$23.7 billion (14.6% of China’s total crude oil imports)
  • Saudi Arabia: $20.5 billion (12.6%)
  • Angola: $19.8 billion (12.2%)
  • Iraq: $13.8 billion (8.5%)
  • Oman: $12.2 billion (7.5%)
  • Iran: $11.9 billion (7.3%)
  • Brazil: $8.8 billion (5.4%)
  • Kuwait: $7.1 billion (4.4%)
  • Venezuela: $6.6 billion (4%)
  • United Arab Emirates: $4.1 billion (2.5%)
  • United Kingdom: $3.6 billion (2.2%)
  • Congo: $3.44 billion (2.1%)
  • Colombia: $3.37 billion (2.1%)
  • United States: $3.2 billion (2%)
  • Malaysia: $2.6 billion (1.6%)

However, the US has been China’s fastest-growing supplier of crude, with imports from the US up nearly 2,000% since 2016 (though to be sure, the US only started exporting oil in 2016, and by volume, imports from Russia and Saudi Arabia have risen by a much more significant degree):

  • United States: Up 1,994% since 2016
  • Malaysia: Up 220.9%
  • United Kingdom: Up 101.1%
  • Congo: Up 60.5%
  • Colombia: Up 51%
  • Kuwait: Up 46.4%
  • Brazil: Up 46.2%
  • Angola: Up 42.9%
  • Venezuela: Up 42.8%
  • Russia: Up 40.6%
  • Saudi Arabia: Up 31.7%
  • Iraq: Up 29.3%
  • Iran: Up 27.2%
  • Oman: Up 9.1%
  • United Arab Emirates: Up 6.1%

But the worry here is, again, that the escalating trade battle with China will spill over into an all out trade war with the US on one side and the rest of the world on the other. Such a development could see foreign economies blackball US crude – and the possibility that trade tensions could persist might be enough incentive for foreign refineries to look elsewhere. What’s worse all of this is happening just two years after the US allowed crude producers to begin exporting after a more than 30-year ban. 

And while these tensions have done little to slow the rally in crude prices, they could see the spread between WTI and Brent crude continue to widen.

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  • Jesus

    This is Trump’s goal of making US a leading energy player, by shooting itself in the foot with the trade wars against the world’s largest economy. Russia and Iran are eating US’s lunch, while laughing at US schizophrenic and self defeating actions.

    • Assad Did Nothing Wrong™

      Whatever, if China keeps trying to backdoor us with chips in electronics, then expect them to lose their electronics industry too.

      • You can call me Al

        If you fools keep on sanctioning Countries, you lot will lose all your industries.

        MAGA – what a load of tosh. You are done and dusted.

        Now be off and get a McDonalds Yanker.

        • Assad Did Nothing Wrong™

          China is asking to be sanctioned and I don’t care how anti-American you are. I don’t approve of most of our foreign policy but reading this website is a revelation that you all want to see me suffer for being an American.

          • Ronald

            Americans are not the American government, its the government actions that are deplorable, not Americans.

          • You can call me Al

            Actually, that is not true; it is just the US MSM bllx you spew.

            But OK, let’s start again tomorrow.

          • Sinbad2

            No not because your American, but because your stupidity has allowed the most oppressive regime in history to roam the world and kill millions.
            You live in a democracy, you are responsible, you are an accessory to their appalling crimes, and should hang with the people you encourage to kill innocent children. After a fair trial of course.

          • Assad Did Nothing Wrong™

            That shitpost escalated fast.

            You call me stupid for things beyond my control. I can vote for a candidate but can do little to sway the votes of millions of others. Tell me who I should have voted for in 2016 since you are oh so wise.

            I don’t think you could, since you think I should hang. The feeling is mutual and I know there are millions like you calling for death to America for various reasons. Don’t expect an easy fight, troll.

          • Gary Sellars

            US citizenry collectively allow the Deep State-controlled ruling regimes to act the way they do. Whether it is complicity, ignorance, or simple lack of interest, education or knowledge is not relevant. The US is (nominally) a democracy, and its people have not held the regime to account.

          • Assad Did Nothing Wrong™

            It’s called tragedy of the commons and the US population is not the only country guilty of it. Tell me, Gary, how well your country is doing in liberating itself from the Zionist Yoke? If you are Western European, you might not want to embarrass yourself.

          • Gary Sellars

            True enough, and since I’m an Australian I’d agree that our pathetic snivelling bunch of cucked faggot politicians are no better. Our regime excels at being a feckless cowardly pack of imperial satraps willing to act as auxiliaries in whatever stupid Imperial war that Uncle Shmuel decides to wage.

            In our defense, we are not the root cause of said conflicts, so even if we were to curb our corrupt Overlords, the US would still commit global outrages. The onus is on US vioters to step up, cuz none of us non-Muricanz can deliver the needed rebuke.

          • Sinbad2

            “Tell me who I should have voted for in 2016 since you are oh so wise.”

            Anybody, except a Democrat or Republican.

            If you are one of the few Americans who realize that the only way to stop the American war machine is to vote for an independent, I truly apologize.
            If however you continue to vote for the Republicans, who started the Iraq war, or the Democrats that destroyed Libya, I will cheer whilst you are hung.

          • Assad Did Nothing Wrong™

            American politics may be highly polarized, but it is not as black and white as you present it.

            Better go find something else to cheer for, because you will never see me hang.

          • Sinbad2

            Thanks for proving my point, no matter what they do, you will always vote for the 2 teams.
            So you did vote to kill 500,000 Iraqi children, think about that.

          • Assad Did Nothing Wrong™

            2016 was the first election I participated in, so no.

            I guess you expected me foresee exactly how the current administration turned out. The logical conclusion from that is to never trust anyone who runs for political office. And Libertards and Greens had bad policies of their own, they are not to be trusted either.

            If you want to be my enemy along with the yids, have fun goy.

          • Ronald

            They call it a democracy, you call it a democracy, but it’s no democracy.
            Bernie Sanders would be President right now, not Trump, if it was.
            He got elected because even Democrats voted against her, a mad war dog.
            This most oppressive regime in history kills millions, but not only abroad.
            It will take All of us free minded, and loving people to stop the forces of darkness.
            They are not only in America.

          • You can call me Al

            Each to their own.

        • Sinbad2

          Yes, so don’t stop them, let them kill their empire whilst we laugh and drink beer.

      • Ronald

        Israel has the # 1 ranking for back door chips.
        BDS.

        • Assad Did Nothing Wrong™

          I have a problem with anyone putting a backdoor in my electronics. I don’t even want my own government doing it.

          • You can call me Al

            What like Intel ?, oh on the bequest of the NSA.

          • Sinbad2

            Well the US did it years ago, all US manufacturers have allowed the NSA to install backdoors in their products. Public Key Encryption code generators were designed by the NSA to allow access. The SWIFT system was also forced to allow NSA access.
            The US pioneered electronic spying, and still leads the world in snooping into ordinary peoples lives.