Chinese refiners are looking for alternative crude oil suppliers following a 10% tariff imposed by the Chinese government on U.S. crude oil. This retaliatory measure is in response to the Trump administration's increase in import taxes on Chinese goods. The move is expected to tighten the market for lighter, sweeter crude as China seeks alternatives to U.S. crude, particularly from West Africa.
Chinese refiners are actively seeking alternative sources of crude oil following the imposition of tariffs on U.S. crude by the Chinese government. This retaliatory measure comes in response to the Trump administration's decision to increase the import tax rate on Chinese goods by an additional 10%. According to Bloomberg, Chinese state-owned oil companies are making efforts to resell existing U.S.
oil cargoes scheduled for delivery over the next two months and are exploring options from the Middle East and Africa. Energy Aspects estimates that Chinese petroleum importers will need to find approximately 200,000 barrels of alternative crude oil daily to offset the volume traditionally sourced from the U.S. China implemented a 10% import tariff on U.S. crude oil earlier this month, along with a 15% levy on U.S. coal and liquefied natural gas (LNG). While analysts suggest that the tariffs are unlikely to have a significant immediate impact on either the U.S. or China, given the relatively small volumes of U.S. oil and LNG imported into China recently, the reluctance of Chinese importers to purchase the now more expensive American crude with the added tariff is expected to tighten the market for lighter, sweeter crude.This shift in demand is anticipated to drive Beijing to seek alternatives to U.S. crude and increase its sourcing from West Africa, a trend that Chinese importers are already pursuing, as reported by Bloomberg. The impact on the LNG market, however, is projected to be more pronounced, as U.S. liquefied gas has accounted for approximately 12% of China's total LNG imports over the past few months. Bloomberg previously reported that Chinese LNG buyers are actively seeking buyers to whom they can resell already contracted U.S. volumes, utilizing a so-called flexibility destination clause within long-term agreements they have with U.S. suppliers. 'These tariffs on U.S. LNG directly undermine the Trump administration’s efforts to expand American energy exports and strengthen our geopolitical influence,' Charlie Riedl, Executive Director of the Center for LNG, a trade group representing many U.S. LNG exporters and developers, told Reuters earlier this week
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