Oil Tankers With US Crude Race to Beat China Tariff Deadline
Ahandful of oil tankers carrying US crude to China are racing to beat the September 1 deadline when Beijing's 5% tariff on US crude imports will kick in, but not all will cross the finishing line on time.
The seaborne cargoes underscore how the US-China trade conflict has elevated the risk for buyers and traders who were caught off-guard by the tariff announcement last week, and left scrambling to find options to resell or divert shipments while they were still at sea.
The risk was exacerbated amid Chinese buyers ramping up purchases of US commodities when trade tensions eased by the end of June, and the cargoes purchased since then had already sailed.
Two very large crude carriers -- Liberia-flagged Svet and Hong Kong-flagged Landbridge Prosperity -- are scheduled to arrive at Chinese ports just before the tariff kicks in, according to cFlow, S&P Global Platts trade flow software.
The 321,075-tons deadweight Svet sailed from the Southwest Passage Lightering area in the US on July 7, and arrived at China's Qingdao port on Wednesday. The 308,285- tons deadweight Landbridge Prosperity sailed from the Offshore Galveston Lighterage area in the US on June 30, stopped at Covenas for additional cargo, and is scheduled to arrive at Rizhao port on Thursday.
The UK-flagged Suezmax tanker Energy Triumph loaded at Offshore Galveston Lighterage on July 7, and is also scheduled to arrive at Zhoushan on Thursday, ship tracking data showed.
The majority of US crude shipments headed to China in the last few weeks will not make it before September 1, due to the roughly 55-day voyage. Furthermore, they have been tough to identify as their destinations have not been disclosed to avoid detection.
source: Financial Tribune
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