Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Chinese tariffs may stymie US oil export growth: economists

Commodities | Energy | Oil | Refined Products | Gasoline | Coronavirus

Shifting dynamics in store for Mediterranean LPG


Platts Market Data – Oil

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 9th Annual

Oil | Jet Fuel

Global flight passenger demand down 91% on year in May: IATA

Chinese tariffs may stymie US oil export growth: economists


China imposed 5% tariff on US crude oil in September

US crude exports to China have averaged 169,000 b/d in 2019

Trade fight to limit access to major demand market

Washington — The ongoing trade dispute with China could significantly hinder US crude oil export growth, as US producers lose access to a top demand market, participants at a US Association for Energy Economics conference said this week.

"China's the big growth in demand," said Horace Hobbs, Phillips 66's chief economist, during a panel Tuesday. "The whole focus of US exports will eventually somehow have to get back to China."

In September, China imposed a 5% tariff on $75 billion worth of US goods, including US crude oil. That tariff roughly translates to a cost of about $3/b, likely eliminating potential margins for Chinese refiners, Hobbs said.

The issue could be a prolonged limitation for US exporters, even if US President Donald Trump loses his re-election campaign next year, as his potential Democrat successor may be reluctant to capitulate to China on trade.

"We might be looking at the beginning of endless economic wars," said Kevin Book, managing director with ClearView Energy Partners, during a panel.

Since the US lifted restrictions on crude oil exports, US crude exports have climbed from about 392,000 b/d to a high of nearly 3.16 million b/d in June, according to the US Energy Information Administration. US crude exports averaged nearly 2.73 million b/d in August, according to EIA data, and climbed to nearly 3.1 million b/d in September, according to preliminary data released by the US Census Bureau Tuesday.

US crude exports to China climbed as high as 469,000 b/d in March 2018, accounting for about 24% of total US crude exports that month. But US-China trade tensions have slowed imports of US crude, even without a tariff in place.

In August, September and October of 2018 and January 2019, China imported no US crude. In September, as the 5% tariff was imposed, China imported 201,000 b/d of US crude, its lowest level of imports since April. Through the first nine months of 2019, US crude oil exports to China have averaged 169,000 b/d, according to EIA and Census data.

US exporters have increased oil shipments to other markets, particularly Korea, the Netherlands and the UK, the data showed.

The issue has impacted all energy trade between the US and China, including LNG and LPG, of which China is the world's largest importer and the US the largest exporter. However, this is limited by a 20% tariff.

"We certainly would have done more business with China had the trade war not been on the forefront," Cheniere vice president of corporate development and strategy Oliver Tuckerman said during a panel.

Tuckerman said Cheniere is still selling committed LNG cargoes to China's CNPC.

Hobbs said US oil export growth likely will not grow substantially with limited or no access to Chinese refiners.

According to EIA, global petroleum demand will grow by about 1.3 million b/d from 100.82 million b/d in 2019 to 102.12 million b/d in 2020. Roughly 40% of that growth will come from China, where petroleum demand will increase from 14.42 million b/d in 2019 to 14.89 million b/d in 2020.

US oil export capacity has been boosted by recently started Permian pipelines, including the 600,000 Epic and 700,000 b/d Cactus II pipelines. The 900,000 b/d Gray Oak pipeline, which will move 900,000 b/d of Permian crude to the Gulf, is expected to start up early next year.

S&P Global Platts Analytics forecasts Permian-to-Gulf pipeline capacity to increase by 2.4 million b/d between mid-2019 and mid-2020 to 5.2 million b/d.

While the trade dispute with China could impact long-term growth of US exports, its near-term impacts may be minimal, said Mark Finley, a fellow in energy and global oil at Rice University's Baker Institute.

"Overall US exports, both crude and refined products, have continued to grow even after the Chinese tariffs," he said. "So the high-level evidence shows the US surplus continues to find its way into the global market."

US exports of crude and petroleum products averaged more than 8.5 million b/d in August, up 1.35 million b/d from a year earlier and nearly doubled from August 2015.

-- Brian Scheid,

-- Edited by Zac Aiuppa,