Kenneth Afor with agency report
Asia’s biggest oil company, Sinopec of China, on Tuesday moved to to apply for tariff waiver from the Chinese government to import United States’ crude oil into China.
The decision followed US president Donald Trump’s announcement at the G7 meeting in France on Monday that China has said that it was ready for a trade talk.
According to monitored news wire sources, Sinopec is drafting to the Chinese government a $3 dollar per barrel import of US crude oil into China for buyers in the country.
On Friday, the two countries heated the world economy by imposing heavy tariffs on goods coming into their countries with China announcing that it would place a $75 billion tariff on goods imported into the country, including crude oil from the US, with effect from September 1 on some goods and another set of goods from December 15.
The US did not relent on China’s move, it went ahead to add $300 billion on goods from China from the initial $250 billion.
However, Sinopec is expected to import about 8 million barrels of US crude oil into China by September 1 as part of its contingency plans. It also plans to store some of US crude oil in bonded storage that is awaiting Chinese customs clearance.
According to analysts, the protracted trade dispute between the two countries has generated a lack of interest from the Chinese local refiners to buy US crude oil despite its economic benefits it has, thereby diverting their businesses to other importers into the countries like VLCC Sophia and VLCC New Ceaser for crude.
Between July and August 5, the US has exported about 7 million barrels of its crude into the Chinese market
Sources also revealed that some Chinese oil traders have no long-term commitment to buying US crude oil except for Unipec; Sinopec sister company.