China is Stepping up US Oil Purchases Before Reviewing Trade Agreement

American and Chinese importers and dealers told Reuters that crude oil shipments from the United States to China will rise dramatically in the coming weeks, as the two largest economies in the world prepare to review an agreement signed in January after a long trade war.

They said that Chinese state-owned oil companies have temporarily booked tankers to carry at least 20 million barrels of US crude for the months of August and September, steps that may allay US concerns that Chinese purchases are at a significantly lower level than purchase pledges under the rolled trade agreement.

China was the largest buyer of US crude, receiving $ 5.42 billion in 2018 before trade tension halted flows almost completely.

China pledged in January to buy products in the energy sector worth $ 18.5 million, including crude oil and natural gas above its 2017 level, implying a total value of about $ 25 billion this year.

According to data from the United States Census Bureau, China’s purchases of US crude as of June 30 amounted to $ 2.06 billion, highlighting the decline caused by the Covid-19 pandemic and the limited impact of the Phase 1 agreement.

However, the sources said that there has been a jump recently in the purchases of the Chinese state-owned oil and gas company PetroChina and its major refiners, Sinopec.

Reuters reported that a review of the US-China trade agreement initially scheduled for Saturday will be delayed due to timing issues, and a new date has not yet been agreed.