Economy

China Has Stopped Buying American Oil

JM Ashby
Written by JM Ashby

China's largest oil refiner recently rolled back their plans to expand their purchases of American oil from 300,000 barrels per day to 500,000 per day because of Trump's trade war, but the situation is apparently far worse than that.

According to census data released this morning, China didn't just cancel their plans to buy more oil; they've actually stopped buying American oil.

From Bloomberg:

The world’s second largest economy halted purchases of U.S. crude in August for the first time since September 2016, according to U.S. Census Bureau data released Friday. In July, Chinese buyers received nearly 12 million barrels of crude from the U.S. [...]

The future of American crude shipments into China remains uncertain and there is still no guarantee that threats of a U.S. crude tariff won’t resurface as the trade conflict persists. American oil producers, particularly those who operate in the key Permian Basin of West Texas and New Mexico, risk feeling the pain from the ongoing tensions as they increasingly look to foreign shores to market their supplies, as local demand becomes saturated.

For the environmentally conscious, this doesn't mean American oil companies will pump less oil, it just means they'll be joining the club with American farmers who've lost access to the largest market in the world. China stopped buying American soybeans and sorghum over the summer in response to Trump's tariffs.

I think we should expect that the club of American industries who've lost access to the Chinese market will become far less exclusive in the coming months and next year as China replaces imports.

After Trump imposed tariffs on $200 billion in Chinese goods, China's state-controlled media said the government would focus on replacing imports and opening up access for other countries that aren't waging a trade war against them. And according to other reports, China is replacing American oil with oil from West Africa.

I'm certainly not an expert, it seems most likely to me that China will stop buying most if not all American agricultural products in the near future. And in that case, Trump's bailout for farmers during the current harvest season will be dwarfed by what they and other industries ask for next year.

We may see members of Congress call for a full-blown stimulus bill next summer.

  • muselet

    One can hardly blame China for responding to the Trump Tariffs, nor for making its response hurt.

    That Donald Trump does blame China for responding—and whingeing that retaliatory tariffs somehow constitute meddling in US elections (?)—shows precisely how far out of his depth he really is.

    But wait, it gets worse (from the Washington Post, via Kevin Drum):

    … [T]he Trump administration seeks to add clauses in future deals that allow the U.S. to withdraw if a trade partner forges a separate deal with a “nonmarket economy”—a clear reference to China. That could force Britain [which hopes, post-Brexit, to make free-trade deals on a nation-by-nation basis] to choose between Washington and Beijing.

    This isn’t merely a twit doing stupid stuff he doesn’t understand. This is a twit deliberately doing stupid stuff because he’s too much of a twit to see how much that stupid stuff will hurt US interests in the world. Drum concludes:

    Anyway, the whole thing sounds pretty laughable. It also sounds very Trumpish. But I repeat myself.

    Sopunds right to me.

    –alopecia

  • katanahamon

    Gee, what happens when you let a failed, bankrupted, aggressive, narcissistic and likely senile idiot with delusions of conspiracy play at being President, while being supported by utterly immoral politicians greedy to get their agenda passed as law?

    • Tony Lavely

      Yeah. Who knew?

      • Georgie

        Just normal people.

        • Tony Lavely

          Yeah, but they aren’t Repubs, you know, and therefore don’t really exist except to make Welfare work.
          But the important ones (not F, White, Evangelicals, brainwashed by fear and loathing of other), they had no clue.

  • Aynwrong

    The schadenfreude is bittersweet. Yes it’s satisfying to see all the predictions made about come true and yes these businesses are run by men who probably supported Trump for the sheer venality of the tax cuts or maybe they really are just Republicans who were dumb bigoted enough to believe Trump was going to make America great again and yes it will be many Trump’s own voters who end up paying for this but as a patriot who wants to see good things for my country those idiots getting slapped around by their own stupidity isn’t nearly enough.

  • And if Trumpov is still in office and we’ve taken back the House, I better hear Dems screaming from the hilltops about how fiscally irresponsible Trumpov and the GOP have been. I want to see that horse kicked until it’s mincemeat and the idiots who voted for the Orange Menace have suffered for it. And yes, I am that bitter.

    • katanahamon

      I think we have Dems screaming already, but it isn’t being allowed to be seen by the media. All we see is Rump, Rump, Rump, and the occasional interview of whichever rightwing politician can match Rump’s verbal outrage. The media not only didn’t learn its lesson from helping to elect Rump, they are now helping him to stay in office and get the right wing agenda passed into law.

    • Tony Lavely

      But if they can’t override the veto…