News | Argus Media

US crude exports to China dropped to zero in August, down from about 384,000 b/d in the previous month amid the escalating trade war between the two countries.

The drop contributed to an overall decline of US crude exports in August to 1.75mn b/d, down from 2.14mn b/d in July, according to Census Bureau trade data released today. Exports had reached a record high of 2.2mn b/d in June.

Canada was the top destination for US crude in August, taking in 343,000 b/d. South Korea was second, importing 267,000 b/d and Taiwan was third with 198,000 b/d.

China took an average of 377,000 b/d of US crude in the first seven months of 2018 and was consistently the first or second top destination for US crude.

But Chinese state-controlled trading firm Unipec stopped buying US crude in August as relations with Washington deteriorated.

China had planned to impose a 25pc import tax on US crude as part of retaliatory tariffs on $16bn/yr of imports in August. But crude was unexpectedly removed from the final list.

The latest, third round of US tariffs and Chinese counter-tariffs went into effect on 24 September. The US tariffs now cover about half of overall imports from China, and the US administration has a fourth round of tariffs “ready to go” on the remaining $267bn/yr of imports. China has imposed tariffs on around $110bn/yr of products from the US, equivalent to 70pc of total imports from the country.

Unipec said last month it is not ready to resume securing US crude cargoes for its refining system in China, but continues to buy US crude for trading purposes. It planned to resell US crude to various refiners outside China, including in India, Taiwan, Thailand and Europe.

The census trade data includes several categories of oil, including crude under 25°API, crude that is 25°API or higher, and condensate derived wholly from natural gas.

Since the US lifted 40-year-old restrictions on most oil exports in December 2015, domestic crude has been exported to countries around the globe. The top two destinations for US crude in 2017 were Canada and China.

Top destinations for US crude exports, August 2018
Country US crude (b/d)
Canada 343,000
South Korea 267,000
Taiwan 198,000
India 196,000
United Kingdom 152,000
— US Census

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