U.S. China Trade War: A Shipper’s Guide

U.S. China Trade War: A Shipper’s Guide


The restriction on U.S. crude exports was lifted in December 2015, removing a market distortion that reduced the value of U.S. crude oil relative to other freely traded seaborne barrels. Since that time China has emerged as a major importer of U.S. sourced crude oil as it sought to improve its strategic diversity of oil sources. Vessels Value Analyst Court Smith, discusses what’s next for the shipping industry if possible tariffs are put in place by the U.S. against China.

Most of the exports to China have been on VLCCs, which add substantially to ton mile demand given the length of the voyages. With China dialling back purchases, we expect to see the discount for U.S. oil to widen, penalising U.S. producers and sending more exports to European and other Atlantic Basin refiners, which will be good for Aframaxes, and bad for VLCCs.

For more information, visit: www.vesselsvalue.com

25th June 2018

 

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