By Irina Slav
China has opened applications for tariff exemptions on a number of US commodities and commodities, including crude oil and liquefied natural gas, Reuters reported today.
Tariffs were attributed to the drop in US oil and LNG exports. UU. To China, which is one of the main importers of both products. They also interfered with the plans of the US LNG companies. UU. For a new export capacity.
After the signing of the Phase 1 trade agreement between Washington and Beijing, many hoped that this would restore exports and even boost them significantly. The terms of the agreement include the addition of US energy exports. UU. For about $ 18.5 billion this year and another $ 33.9 billion in 2021. Additional exports cover the entire spectrum of fossil fuels and its derivatives, from crude oil and liquefied natural gas to various fuels, as well as coke and coal.
However, the coronavirus outbreak has seriously affected China's demand for oil and even LNG, as virtually every industry in the country suffers the consequences of large-scale quarantines and other travel bans.
State refineries have reduced their processing rates by one tenth this month and will cut further in March, according to OilX. The combined cut for PetroChina, Sinopec and CNOOC for February was around 940,000 bpd, according to a Reuters. report. Private refineries cut even more, as OilX calculates the cut by 25 percent.
According to the American Petroleum Institute, however, even if there is a strong demand for US oil, producers may not be able to meet it according to the Phase 1 agreement. Bloomberg earlier this month reported that the industry group had warned Washington that oil production capacity would have to be extended a bit to comply with the terms of the trade agreement. Even so, the elimination of tariffs would be a step in the right direction for US oil and LNG producers, since Chinese demand for their product will recover sooner or later.
By Irina Slav for Oilichelin