Sinopec Confident of Uptick in Oil Trade
China Petroleum and Chemical Corp, or Sinopec, the world's largest refiner, expects crude oil trade between China and the US to show further growth as the world's two biggest economies play complementary roles as producers and exporters of oil.
The energy trade between China and the US has been steady and complementary, with massive potential for further cooperation, said Lyu Dapeng, spokesperson of the company.
If the two countries can deepen cooperation in the fields of energy trade, it will be a win-win for both sides, he said.
According to Lyu, Sinopec is the company that imports the most amount of crude oil worldwide, with imports accounting for 60 percent of its total crude processing volumes. It is also the first company in the Asia-Pacific region that has imported crude from the US.
The company's trading arm Unipec purchased 16 million barrels, or about 533,000 barrels per day, of US crude in June, according to Reuters, the largest volume ever to be lifted in a month by the company.
Sinopec has been working on diversifying its imports of crude in recent years to increase vigilance against risks, and the company is only willing to buy more crude oil if the US oil remains attractively priced compared with global competition, said Lyu.
Analysts believe increasing US crude oil exports will help the United States reduce its trade deficit with China, which will in turn help ease the threat of trade disputes between the world's two biggest economies.
Wang Lu, an Asia-Pacific oil and gas analyst at Bloomberg Intelligence, said oil and gas offer solutions to cutting the US trade gap with China as the countries work toward a wider trade agreement and there is a lull in trade disputes.
"Record-high US oil output and surging demand for gas in China provide a foundation to further boost trade in the long run, and we believe China is set to buy more US oil, extending last year's trend and reducing the trade deficit," she said.
"We believe China can more than double its oil trade with the US this year from 2017, while higher volume and rising oil prices in 2018 may triple the value of last year's oil trade, which was worth $4.4 billion, or 1.2 percent of 2017's trade deficit."
Average US crude oil production may rise to a record 10.7 million barrels a day this year, setting the stage for more exports, she added.
Figures from Bloomberg Intelligence show that the US market share as a percentage of China's total oil imports rose to 3.5 percent in the first quarter from 1.8 percent in 2017, while that of the Middle East fell to 42.3 percent from 43.4 percent.