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Beijing slapped 10% tariffs on U.S. crude imports after

U.S.

levies imposed

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U.S. crude export growth stalled in 2024, rising just 0.6%

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Medium-sour crude exports to China may stay in U.S.

refineries

By Arathy Somasekhar

HOUSTON, Feb 6 (Reuters) - China's retaliatory tariffs

on the United States may cause U.S. oil exports to decline in

2025 for the first time since the COVID-19 pandemic, after

growth plateaued last year.

Exports of U.S. crude have surged more than 10 times since

it lifted a 40-year federal ban on the export of domestic oil in

2015. That has helped United States become the world's

third-largest exporter behind Saudi Arabia and Russia, blunting

the global impact of production cuts by the Organization of the

Petroleum Exporting Countries and its allies.

While China's appetite for U.S. oil has diminished in recent

years thanks to discounted Russian and Iranian oil, exports were

166,000 barrels per day in 2024, accounting for nearly 5% of all

U.S. crude exports, according to ship-tracking data from Kpler.

U.S. crude export growth stalled in 2024, rising just 0.6%

or 24,000 bpd in 2024, to average 3.8 million bpd, according to

Kpler, as U.S. companies kept a lid on shale production amid

worries about global demand.

Calling China's share of U.S. exports "not an insignificant

amount", Matt Smith, an analyst at Kpler, also said

international demand for American crude exports may be peaking

"and China's retaliatory tariffs could only further accelerate

that."

About 48% of the U.S. crude imported by China were medium

density types with a higher sulfur content, such as Mars and

Southern Green Canyon that are considered medium-sour grades.

That type of crude is ideal for U.S. refineries to process and

could easily find buyers domestically, particularly if the U.S.

imposes tariffs on Canada and Mexico, analysts said.

"Medium sours are welcome barrels in the U.S. Gulf Coast.

Refiners need it," said Rohit Rathod, market analyst at energy

researcher Vortexa, who sees U.S. exports possibly falling to

3.6 million bpd this year, especially if the Canadian and

Mexican tariffs are enacted and medium-sour crude is kept.

Roughly 44% of China's crude imports from the U.S. were

lighter density, lower-sulfur types, like West Texas

Intermediate produced in Texas, which are known as light, sweet

grades. That type of oil could find demand from European and

Indian refiners at competitive prices and could continue to be

exported, analysts said.

The Louisiana Offshore Oil Port (LOOP) handled nearly half

of all exports to China last year, according to Kpler. The

company was not immediately available for a comment.

Another 25% of U.S. exports to China came from Enbridge's ( ENB )

Ingleside, Texas, facility near Corpus Christi, Kpler

data showed.

"The light sweet market is so wide and liquid, we don't see

it having an impact on exports," a source familiar with

Enbridge's ( ENB ) Ingelside operations said. China accounted for less

than 15% of the site's export volumes last year.

Enbridge ( ENB ) did not immediately reply to a request for comment

sent outside of business hours.

Among the top sellers of U.S. crude to China is Occidental

Petroleum ( OXY ), which sold at least 13 cargoes of light,

sweet WTI Midland oil to there in 2024, according to Kpler.

Occidental did not immediately reply to a request for comments.

For China, the impact is likely muted as U.S. imports

accounted for 1.7% of the country's total crude imports in 2024,

worth about $6 billion, according to Chinese customs data, and

down from 2.5% in 2023.

China increased imports from Canada by about 30% last year

to over 500,000 bpd, thanks to the expansion of the Trans

Mountain pipeline.