Oil-hungry refiners across China have ramped up purchases of US crude in May amid an erosion of supplies from sanctions-hit Iran and Venezuela, even as trade tensions rage on between Beijing and Washington.
China imported 786,638 metric tons of US crude oil in May, the equivalent of 186,000 barrels a day, the most since September, data released by the General Administration of Customs show. Shipments in May from Iran fell by two-thirds from the month before to the lowest level since October 2018, while receipts of Venezuela crude more than halved.
American oil exporters are emerging as the beneficiary of global supply disruptions and a collective output-curb decision by OPEC and its allies, with sales to Chinese customers surging 65% from the previous month.
Buyers across the world’s top oil importer have shrugged off their earlier reluctance to purchase oil over concerns of possible tariffs as they seek a diversity of supplies and cheaper oil.
'It’s quite natural that the US would step in to fill the supply gap of Iran and Venezuela given its output has been rising,' said an analyst. It makes economic sense to import more oil from the US as the arbitrage is open.
At least six million barrels of US crude set off for Chinese refineries in May, according to ship tracking data. In June, American shipments to China are expected to reach at least 4 million barrels, according to shipping reports.