US Crude Shipments to China Totally Halted

US crude oil shipments to China have “totally stopped”, the president of China Merchants Energy Shipping Co. said on Wednesday, as the trade war between the world’s two biggest economies takes its toll on what was a fast growing businesses.

Washington and Beijing have slapped steep import tariffs on hundreds of goods in the past months. Although US crude oil exports to China, which only started in 2016, have not yet been included, Chinese oil importers have shied away from new orders recently, Reuters reported.

“We are one of the major carriers for crude oil from the US to China. Before (the trade war) we had a nice business, but now it has totally stopped,” Xie Chunlin, the president of CMES said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong.

Ship tracking data in Refinitiv Eikon confirmed that US crude oil shipments to China ground to a halt in September.

“It has unfortunately happened, the trade war between the US and China. Surely for the shipping business, it is not good,” the CMES president said.

He also said the trade dispute was forcing China to seek soybeans from suppliers other than the United States, adding that China now bought most its soybeans from South America.

*** Saudi-Russia Private Deal

Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices and informed the United States before a meeting in Algiers with other producers, four sources familiar with the plan said.

US President Donald Trump has blamed the Organization of the Petroleum Exporting Countries for high crude prices and called on it to boost output to bring down fuel costs before the US congressional elections on Nov. 6.

The sources said Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak agreed during a series of meetings to lift output from September through December as crude headed towards $80 a barrel. It is now over $85.

“The Russians and the Saudis agreed to add barrels to the market quietly with a view not to look like they are acting on Trump’s order to pump more,” one source said.

“The Saudi minister told US Energy Secretary Rick Perry that Saudi Arabia will raise output if its customers asked for more oil,” another source said.

Oil prices were firm on Wednesday on expectations of tighter markets once US sanctions target Iran’s petroleum industry from next month, although a strong dollar and rising US crude supply curbed gains.

Brent crude oil futures were at $84.86 per barrel on Wednesday, up 6 cents from their last close. US West Texas Intermediate crude futures were up just 1 cent at $75.24 a barrel, Reuters reported.

source: Financial Tribune