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Unipec resells US oil to India, South Korea after China tariffs

September 06/2019

MOSCOW (MRC) -- Chinas Unipec is reselling some of the crude oil it imports from the United States to buyers in India and South Korea to avoid tariffs Beijing imposed in its trade war with the US, reported Reuters with reference to sources.

Unipec, the trading arm of Asias top refiner China Petroleum & Chemical Corp, or Sinopec (600028.SS), is Chinas main buyer of US crude, but its imports have been disrupted after Beijing placed a 5% tariff on US crude imports from Sept. 1.

The sales to South Korea and India are an unusual move for Unipec and directly triggered by the tariffs, the sources said.

More Asian refiners are buying US crude because of tighter supply caused by US sanctions on Iran and Venezuela.

Sinopec declined to comment.

To mitigate losses from the tariffs, the company has also sought waivers from Beijing for its U. crude oil imports in September and October, Reuters reported last month.

Unipec, which usually imports 6 million barrels of US crude such as West Texas Intermediate (WTI) Midland crude to China per month, is reducing imports to around 2 million barrels on average each month for September and October when the tariffs start, one of the sources said.

It initially planned to store more of the oil in bonded tanks, but then moved to re-sell the oil to other US oil buyers in Asia, namely India and South Korea, the person said. It was not immediately clear what led to the change.

Unipec offered US cargoes that theyve already purchased to South Korean refiners after the US new tariffs kicked in, another one of the sources said.

The very large crude carrier (VLCC) Dorra was chartered by Unipec and loaded US crude last August and is now heading to the South Korean port of Yeosu, according to ship tracking data on Refinitiv Eikon. The VLCC is expected to discharge in mid-October.

Another VLCC carrying US crude, the Kirkuk, changed its destination from Chinas Shandong port to Indias Sikka on Aug. 31, one day before tariffs kicked in, according to Refinitiv shipping data.

A shipping source said the Kirkuk is carrying WTI Midland crude for Reliance Industries Ltd (RELI.NS) and is expected to arrive at Sikka by the end of September or early October.

The seller of the cargo is not immediately known.

Indian refiner Bharat Petroleum Corps (BPCL.NS) head of refineries R. Ramachandran told Reuters that a Chinese trader has offered a cargo of US oil to the refiner after Beijings latest tariff hike. But he declined to identify the seller.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, Sinopec, India, China, USA, South Korea.
Category:General News
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