First U.S. crude cargoes head to China since trade
breakthrough: sources
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[January 15, 2019]
By Collin Eaton
HOUSTON (Reuters) - Three cargoes of U.S.
crude are heading to China from the U.S. Gulf Coast, trade sources said
on Monday, the first departures since late September and a 90-day pause
in the two countries' trade war that began last month.
The vessels left Galveston, Texas, last month and are scheduled to
arrive at Chinese ports between late January and early March, according
to shipbrokers and vessel tracking data. The shipments mark a change
since Chinese buyers largely began avoiding U.S. oil during the trade
dispute that flared last summer.
"It looks like China has resumed purchasing U.S. crude," one U.S.-based
shipbroking source said. The person, who declined to be identified
because he was not authorized to speak publicly about the matter, said
the destination data could yet change.
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China is the world's biggest crude importer and became a top buyer of
U.S. crude after Washington lifted a 40-year ban on shipments in late
2015. It imported 325,000 barrels per day (bpd) of U.S. crude in the
first nine months of 2018, customs data showed.
Beijing has also resumed purchases of some U.S. soybeans for delivery
this year. But China's 25 percent tariff on U.S. soybean cargoes remains
in place.
The supertanker Alboran carrying about 2 million barrels of oil recently
rounded South Africa's Cape of Good Hope and is due to arrive in China
late this month, said brokers, citing fixture data.
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Crude oil storage tanks are seen from above at the oil hub, in
Cushing, Oklahoma, U.S., March 24, 2016. REUTERS/Nick Oxford/File
Photo
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The Almi Atlas and the Manifa, two other vessels carrying 2 million barrels of
crude, are expected to reach China in late February or early March. The two
ships are currently located off Brazil, according to Refinitiv Eikon vessel
tracking data.
The cargoes mark the first shipments of U.S. crude to China since U.S. President
Donald Trump in December said China would begin taking more American products.
"It's a follow through of statements by the Chinese government they would indeed
begin purchasing commodities from the United States again," said Reid I'Anson,
an energy economist at data provider Kpler.
As China reduced U.S. crude imports, more American oil flowed into neighboring
Asian countries, including India, Japan, Taiwan and South Korea. U.S. exports
climbed to 2.33 million bpd in October, up from 2.2 million bpd in June.
(Reporting by Collin Eaton; Editing by Richard Chang and Cynthia Osterman)
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