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Thursday, Oct 17, 2019

India grabs distressed US oil as China sells tariff-hit supply

Beijing announced it would impose the 5% levies -- the first ever Chinese tariffs on U.S. oil -- on Aug. 23 and they took effect Sept 1.

india Updated: Sep 05, 2019 16:09 IST
Dhwani Pandya
Dhwani Pandya
Bloomberg
Bharat Petroleum Corp. bought one or two cargoes of US crude that were recently diverted from its original destination of China
Bharat Petroleum Corp. bought one or two cargoes of US crude that were recently diverted from its original destination of China(HT Photo)
         

An Indian state-owned refiner has swooped in to buy American oil that was en route to China but due to arrive after new tariffs kicked in.

Bharat Petroleum Corp. bought one or two cargoes of US crude that were recently diverted from its original destination of China, Refineries Director R. Ramachandran said in an interview. He didn’t identify the seller, how big the shipments were, or the name of the ships. It’s possible BPCL could buy more American oil that was headed to China, he said.

Beijing announced it would impose the 5% levies -- the first ever Chinese tariffs on US oil -- on Aug. 23 and they took effect Sept. 1. Six tankers carrying about 12 million barrels of U.S. crude were on the way to China at the time of the announcement. At least one of those vessels arrived before the deadline, while another ship may have offloaded its cargo at a port near Qingdao before the tariffs took effect.

Unipec -- the trading arm of China’s state-owned oil giant Sinopec -- offered US crude that couldn’t arrive in the Asian country before Sept. 1 in late August. At least three potential Asian buyers received offers from Unipec, according to people with knowledge of the matter.

China was the biggest foreign buyer of American crude as recently as the middle of last year but imports were subsequently slashed as the trade dispute worsened. Purchases picked up again this year, reaching 1.5 million tons in July, data from the General Administration of Customs show.

Separately, Ramachandran said BPCL is looking to process US West Texas Intermediate Light and Louisiana Light Sweet crude, two American grades that the Indian refiner has yet to purchase.

(The story has been published from a wire feed without any modifications to the text)

First Published: Sep 05, 2019 15:56 IST

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