China’s Sinopec started buying oil from the USA


Chinese state oil refiner Sinopec Corp. bought the first batch of oil from the US after the export ban existed for 40 years was cancelled in December last year.

According to the source of the agency Reuters, the batch will be shipped from one of the southern ports in the United States in March, and may put a start to a constant supply to China.

Unipec (the trading arm of Sinopec) rents storage facilities in the Caribbean islands, and that will allow it to easily blend the heavy US crude and cheaper oil from Latin America in order to create an ideal mixture for Chinese refineries.

The first batch of the US oil was already sent to Europe, but it is rather a symbolic sale for US companies who were seeking for the abolition of the embargo on the export for 2 years, because according to traiders, supplies to Europe are unprofitable. At the same time sales to Sinopec – the second largest oil processor in the world – look promising.

“Exports of American oil is good news for the global market because it allows processors of the Asia-Pacific region to diversify sources of supply at competitive price. Our storage in the Caribbean islands is well suited for such supplies,” – said a source at Sinopec.

Considering the navigation restrictions along the US Gulf Coast, the batch is not expected to exceed 600 thousand barrels worth about $20 million. This amount is equal to China’s imports in approximately 2 hours.

Source: Rosbalt


Image: ㇹヮィㇳ (under CC BY 2.0)