The trade war that emerged between the United States and China could encourage the exports of US crude oil lower in 2025 for the first time since Pandemi by reducing access to the Chinese market, according to analysts.
That view reflects the unwanted potential consequences of President Donald Trump’s protectionist policy, contrary to the oath of his government to maximize US oil and gas production that has recorded.
The US has grown into the third largest exporter in the world behind Saudi Arabia and Russia since revoking a 40-year federal ban on domestic oil exports in 2015. While crude oil exports only grew a little in 2024, the last time they fell 2021, after the Covid-outbreak 19 cut global energy demand.
“International demand for US crude oil may peak, and this can only speed up it further,” said Matt Smith, an analyst at the KPler.
Rohit Rathod, a senior analyst with a Vortexa boat tracking company, said he hoped that the total exports of US oil would be slipped to 3.6 million barrels per day in 2025 of 3.8 million BPD in 2024, because China tariffs maintain US oil value in House.
China consumes around 166,000 barrels of US crude oil every day, around 5% of all US export cargo. Some of them can remain on the US coast or diverted to other markets after Beijing announced the retaliation rate this week.
Decreased exports will most likely consist of types of oil with medium density with higher sulfur content, such as mars and southern green canyon which is considered a middle class. These types form about 48% of US crude oil imported by China last year.
Such values are ideal for US refineries and can easily find buyers in the country – especially if the United States follows up its threat to impose new tariffs on Canadian and Mexican oil, analysts said.
“Medium Sours is a barrel received at the beach of the Teluk AS. Penytiling needs it, “said Rathod.
Most Chinese raw imports from the US are lighter density, lower sulfur types, such as West Texas intermediaries, known as mild and sweet values.
The type of oil can be diverted to European and Indian refiners at competitive prices, analysts said.
Louisiana’s offshore oil port handled almost half of all exports to China last year, according to the KPler.
The company is not immediately available to be asked for comments.
25% of other US exports to China originated from Enbridge’s Ingleside, Texas, facilities near Corpus Christi, KPler’s data showed.
The Enbridge facility will see a very small impact because less than 15% of its historical volume has gone to China, said Phil Anderson, senior vice president at the company.
The market is very liquid globally for mild crude oil, “he said.
Among the top sellers from crude oil to China is Occidental petroleum, which sells at least 13 mild cargo, the sweet WTI Midland there in 2024, according to the KPler.
Occidental did not immediately reply to a comment request.
For China, the impact is possible to be muted because US imports only contributed 1.7% of the total country’s capital imports in 2024, worth around $ 6 billion, according to Chinese Customs data, and fell from 2.5% in 2023.
China has increased imports from Canada by about 30% last year to more than 500,000 BPD, thanks to the expansion of the Trans Mountain pipe. Chinese appetite for US oil has also decreased in recent years due to Russian and Iranian oil discounts.
Source: Reuters (reporting by Arathy Somasekhar in Houston; editing by Richard Valdmanis, Christian Schmollinger and Rod Nickel)
