China's biggest oil refiner was on track to nearly double their purchases of American crude oil in the next fiscal year, but those plans have been canceled according to Bloomberg.
Just as they are (or were) with many other things, China is the biggest buyer of American oil in the world but that may not last much longer.
U.S. oil exports to China are becoming a casualty of Donald Trump’s trade war with Xi Jinping’s administration.
Unipec, the trading unit of top Chinese refiner Sinopec, has put a plan to boost U.S. crude imports on hold as it assesses the impact of the Asian nation’s trade war with America, according to company President Chen Bo. It previously planned to raise volumes to 500,000 barrels a day in 2019, compared with 300,000 barrels daily from January to August this year, he said. [...]
Before the tariff kerfuffle, U.S. crude exports to China had risen to 15 million barrels in June, the highest volume in data going back to 1996, according to U.S. Census Bureau and Energy Information Administration data. That made the Asian country the biggest buyer of American supply.
China will still be the biggest market for American oil even if they've canceled their future expansion plans, but I suspect that will only last as long as it takes them to find new sources to replace what they're buying from us now.
My inner environmentalist says it's a good thing if China is buying less of our oil, but as far as the environment is concerned it doesn't matter. All this means is American energy companies will be increasingly shut out of the biggest market in the world, it doesn't mean they will pump less oil.
There are no environmental winners here, only economic losers.
The story of American companies being cut off from the biggest consumer market in the world is already a very familiar story following China's decision to stop buying various American agricultural products, but it's probably going to become even more common in the near future as they find more replacements. China's state-controlled media recently said the country will focus on replacing imports.