China has been buying a lot of U.S. crude oil lately, perhaps in a belated attempt to fulfill some of the energy import quotas agreed with Washington last year or perhaps in a bid to take advantage of supercheap U.S. crude. But the buying spree is about to end.
This month alone, China could import between 867,000 bpd, according to Reuters' Refinitiv data, and 900,000 bpd, according to oilfield services company Canary. And then the flow of U.S. oil into China will decline, and it will decline sharply, Reuters' Clyde Russell wrote this week. The reason as simple as it is worrying. The U.S. crude that has been going into China since July—and reaching major records in terms of volume, with the July daily average alone up 139 percent on the year—was bought much earlier, in April, May, and June. This was oil bought when West Texas Intermediate was trading at multi-year lows. By June it had recovered to about $40, Russell notes, so purchases since then have been more modest.
