US oil is trickling back into China after export boom goes bust

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Beijing has declined to slap an import tax on U.S. crude in retaliation against the Trump administration’s tariffs on Chinese goods. But Chinese buyers nevertheless stopped purchasing American supplies last year as the trade dispute with Washington escalated.

After the long pause in trade, China recently offloaded its first shipment of U.S. crude oil this year, although in a roundabout way. About 468,000 barrels of U.S.-origin crude oil was pulled from storage at Yeosu, South Korea, and shipped to China, according to tanker-tracking firm ClipperData.

Hongrun Petrochemical, an independent refiner, received the shipment of Eagle Ford crude at Qingdao Port on Sunday, according to S&P Global Platts, which reported the transfer overnight.

There are also signs that China may soon receive direct shipments of crude oil from the United States.

According to ClipperData, a ship called the Hong Kong Spirit recently loaded almost 2 million barrels at Moda Midstream’s Ingleside terminal near Corpus Christi, Texas, and in the U.S. Gulf. The VLCC — or very large crude carrier — is currently declaring for Yantai, China.

“This destination may, however, change en route, but for now signals optimism on the trade war front. By the time the VLCC makes it to China in April, trade war concerns may have dissipated,” said Matt Smith, director of commodity research at ClipperData.

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