China's Unipec suspends U.S. oil imports as trade spat intensifies
SINGAPORE/BEIJING, (Reuters) - China's Unipec, the trading arm of state oil major Sinopec, has suspended crude oil imports from the United States due to a growing trade spat between Washington and Beijing, three sources familiar with the situation said.
The sources declined to be identified as they are not authorized to speak to the media.
It is not clear how long the temporary halt will last, but one of the sources said Unipec has no new bookings of U.S. crude until at least October.
Unipec and Sinopec, Asia's largest refiner and
Chinese buyers had already slowed their purchases of U.S. oil to avoid a likely import tariff threatened by Beijing amid the escalating trade dispute between the world's two largest economies.
Beijing has put U.S. energy products, including crude oil and refined products, on a list of goods, it will hit with a 25 percent import tax in retaliation for similar moves by Washington. It has not said when it will impose the tariffs.
Unipec said earlier this year it expects to trade up to 300,000 barrels per day (
China's crude oil imports from the United States reached an average of 334,880
The amount of U.S. crude arriving in September is expected to fall to 197,515
The absence of China, the largest buyer of U.S. crude after Canada, has partly weighed on U.S. spot crude prices, making them more affordable for other buyers in Asia.
Unipec will continue trading U.S. crude, selling the oil to Europe, one of the sources said. Still, it is unlikely to ship any of the oil to the east as it no longer has a backstop for the oil if it cannot find a buyer at the right price during the voyage, said three traders that participate in the market.
China's prohibitive import tariff, which amounts to close to $18 a barrel when crude is at $70, has also deterred other Chinese buyers such as state-owned companies PetroChina, as well as state-controlled Zhenhua Oil and independent refiners, from importing U.S. crude, they said.
Meanwhile, a narrower price spread between the Brent and Dubai crude benchmarks has made oil from Europe and Africa that is similar in quality to the U.S. crude more affordable for China. <DUB-EFS-1M>
China's oil imports from West Africa are set to rebound in August to 1.6 million
Unipec has also bought North Sea Forties and Russian Urals last month for September delivery when the arbitrage opened, trade sources said. (Reporting by Josephine Mason and Meng Meng in BEIJING and Florence Tan in SINGAPORE; Editing by Tom Hogue and Christian Schmollinger)
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