Daily Management Review

China buys record batch of US oil


China is preparing to purchase a record-breaking batch of American oil.

As of September, Chinese companies have chartered 19 tankers with a total capacity of 37 million barrels for deliveries from the United States, Bloomberg reports.

As a result, China will account for between a third and a half of all export supplies of American oil workers, which in recent weeks have been in the range of 2.1-3.1 million barrels per day.

If all freight contracts are fulfilled, September shipments of American oil to China will surpass the previous record set in May, when 35.2 million barrels were shipped to the PRC, and this was the largest shipment to a single country in the history of available export statistics.

Most of the tankers are leased by Unipec, a trading subsidiary of one of China's largest operators of the Sinopec refinery. Others were chartered by PetroChina, a subsidiary of China National Petroleum Corp (CNPC).

China is stepping up purchases of US commodities to fulfill the "first phase" of the trade deal it struck in January. It demands that China purchase $ 200 billion worth of American products over two years, including $ 52 billion worth of raw materials.

China is using American oil to fuel its strategic fuel reserve, says Energy Aspects analyst Yuntao Liu.

The new 32 million barrels of reserve storage is due to be commissioned this quarter. In addition, there is a growing demand in the Chinese market for gasoline and petrochemicals suitable for the naphtha-rich American grades, Liu added.

source: bloomberg.com