An oil tanker unloads crude oil at a crude oil terminal in Zhoushan, Zhejiang province, China. Picture: REUTERS/STRINGER/CHINA OUT
But to make way for any surge in American shipments, Chinese importers are expected to dial back orders of similar or pricier grades from places such as Brazil, Norway and West Africa — potentially triggering a shake-up of the light-sweet crude oil market that could span the globe. US crude has not been offered to Chinese independent refiners yet, but the value of West Texas Intermediate Midland delivered to China was estimated to be 50c to $1 a barrel cheaper than Brazil’s Lula crude and some West African crudes, making it attractive, several trade sources told Reuters.
“If China has to fulfil buying huge volumes of US crude, the arbitrage can be closed for most other people because freight could be really high,” said a Singapore-based oil trader.
Source: Energy Industry News (energyindustrynews.net)
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