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The largest refiner in China and Asia, Sinopec, plans to seek a tariff exemption from the Chinese government for its US crude oil imports, Reuters reported on Monday, citing sources familiar with the matter.
On Friday, China and the United States exchanged tariff and offsetting announcements, with Beijing saying China would impose tariffs on a US $ 75 billion product line. US, including crude oil, in two lots beginning September 1 and December 1. 15. US President Donald Trump retaliated by announcing higher rates on Chinese products.
The end of the truce in the trade war between the United States and China and the highly unpredictable nature of the next commercial developments have made Chinese traders even more reluctant to buy US crude oil despite favorable economic conditions, traders said. Chinese to S & P Global Platts earlier this month.
Chinese customers do not touch one-off shipments and do not even think about long-term deals, traders told S & P Global Platts. Some Chinese companies, however, have long-term contracts, such as Unipec, Sinopec's business unit.
In the midst of the trade war, Sinopec is currently developing contingency plans following the announcement by China that it would begin imposing a 5% tariff on US crude as of September 1st. According to Reuters sources, this tariff would increase the barrel of US crude to 3 dollars a barrel buyers.
Sinopec plans to seek some kind of tax exemption on its imports of US crude oil, sources told Reuters. The Chinese refiner is also considering storing United States oil in bonded warehouses, so that it has not yet cleared customs in China, or sent to other destinations, according to one sources.
In September and October, Sinopec is expected to receive a total of 8 million barrels of US crude oil, reports Reuters, citing data from Refinitiv and Kpler.
By Tsvetana Paraskova for Oilprice.com
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