A Reuters exclusive:
China buys first U.S. crude cargo since end of export ban - source
China’s state-run oil refiner Sinopec Corp has purchased its first ever batch of U.S. crude oil for export, a source told Reuters on Thursday, a landmark transaction after the ending of a four-decade ban on domestic exports.
The cargo, due to be loaded from a Gulf Coast port in March, may mark the start of a sustained flow of U.S. oil to China, the world’s second-largest buyer, which is eager to diversify its energy sources. Unipec, its trading arm, also has the advantage of leased oil storage tanks in the Caribbean, which could allow it to blend U.S. shale with cheap, heavy Latin American crudes for a bespoke mix ideally suited to its plants back home.
While the first unfettered exports of domestic crude have already set sail to Europe, those cargoes are generally seen as one-off shipments by companies eager to make a point after fighting for two years to end the ban. Based on current U.S. and world prices, the cargoes do not appear profitable, traders said.
With China, the calculations are less straightforward. As the world's second-biggest oil refiner, Sinopec buys more crude oil than almost any other company, and has worked to improve its supply security by seeking out diverse sources.
“U.S. crude oil exports are positive news for the global market, and make it possible for Asia-Pacific refiners to diversify their supply if the crude is economically competitive," a company source said. "Our upcoming storage capacity in the Caribbean is well-suited to this development.”...MORE