- China imposes 25% import tax on US crude oil, LNG, and coal
- US crude oil producers have a new market in India as it has booked 9.94 million barrels of crude oil in August
- The amount is triple of India’s July import.
- Despite US sanctions Iran still remains an alternate option for India.
India is on track to import a record number crude oil in August. This has given a new lease of hope to U.S. crude oil producers who have found an alternative buyer for cargoes no longer heading to China, reports Reuters.
India’s Oil Import
India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.
This would be almost triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November last year, the previous record for a month.
The August total is also likely to be just above the 9.65 million barrels imported over the first seven months, showing the scale of acceleration in India’s imports of U.S. crude.
Welcome news for US Producers
Indian refiners’ interest in U.S. crude will be welcome news to shale producers looking for buyers outside of China, which is likely to scale back imports as the trade dispute between the administration of President Donald Trump and Beijing escalates.
Although not imposed as yet, China has proposed import taxes of up to 25 percent on U.S. crude, as well as on liquefied natural gas and coal.
While U.S. crude exports to China appear to have held up in August, with about 342,000 bpd expected to arrive, they seem set for a slump in September.
So far, about 203,000 bpd of U.S. crude have been booked for arrival in China next month, according to vessel-tracking data, and the window for more cargoes to be added is closing, given it takes at least three weeks for a tanker to make the journey from the Gulf of Mexico to China’s east coast.
For U.S. crude exporters, India is a market ripe for expansion, given the voyage from the Gulf of Mexico to India’s west coast takes about three weeks, much the same as it does to China’s east coast.
This means shipping costs are more or less in line with sending cargoes to China.
INDIA’S BUMPER IRAN IMPORTS TO FADE?
Indian refiners may also be seeking alternative suppliers as they may be compelled to cut purchases from Iran. Iranian oil exports are under a cloud because of renewed sanctions as part of the Trump administration’s withdrawal from the international agreement aimed at curbing Iran’s nuclear programme.
It must be especially galling for Tehran’s leaders that they stand to lose market share in India to the United States.
However, there is no sign yet that India is cutting back on imports from Iran, with a record 768,000 bpd arriving in July, according to preliminary tanker data.
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Source: Reuters
