The U.S. Rapidly Increases Oil Supplies To China
According to the Wall Street Journal, the United States is rapidly increasing oil supplies to China forcing Middle Eastern exporters to seek new markets or stockpile oil in their already overflowing storage facilities.
As of September, the United States accounted for 7% of China's oil imports, up from 0.4% in January. Meanwhile, Saudi Arabia's share fell from 19% to 15%.
Earlier this year, China pledged to increase purchases of oil and other commodities as part of the first phase of its trade agreement with the United States. In accordance with this agreement, Beijing will have to purchase oil and liquefied natural gas (LNG) in the amount of 52.4 billion USD from the United States by the end of 2021.
China is still far from fulfilling the terms of this agreement, since in the first months of this year it was seriously behind the procurement schedule due to the coronavirus pandemic, experts say.
Oil exports to China from member countries of the Gulf Cooperation Council in September fell by at least 400,000 bpd to 1.6 million bpd, compared with the average level of the second quarter of this year. The upward trend in China's purchases of American oil may change if the U.S. administration changes after the presidential elections in November of this year or if the current US President Donald Trump is re-elected for a second term, but changes his tactics towards China.