U.S. crude oil exports to China grew by 139 percent on the year in July thanks to bargain hunting among Chinese buyers, making the U.S. the fifth-largest supplier of oil to the critical Chinese market.
Reuters reports that the United States exported a daily average of over 866,000 barrels daily, based on a conversion factor of 7.33 barrels per 1 metric ton of crude. This increase boosted the total U.S. imports to China over the first seven months of the year by 31.5 percent on the respective period of 2019 to 4.8 million tons, or a monthly average of some 5 million barrels.
China’s top supplier of crude in July was Russia, which shipped 7.38 tons of crude to China in July, up by 30.1 percent on the year. Iraq came second, replacing Saudi Arabia and sending 5.788 tons of crude to China in July, a 35.7-percent annual increase. Saudi Arabia’s shipments of crude to the key market, however, fell by more than 23 percent last month, to 5.36 million tons. The top five list was rounded out by Brazil, China’s fourth-largest oil supplier in July, with some 4.59 million tons, up by 27.4 percent on the year.
U.S. oil exports to China are likely to see a further boost. Chinese state energy companies had chartered tankers that can carry as much as 37 million barrels of crude for September shipments. This would be a record-high for China, despite the latest escalation between the two, and in accordance with its obligations under the trade deal closed last year.
China committed to buying some $18.5 billion in additional energy supplies from the United States this year and another $33.9 billion next year. The supplies range from crude oil and LNG to coal and oil products. However, the pandemic has shattered the demand that would have helped soak up these supplies, making it a lot harder than before for Beijing to stick to its commitment.