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Oil, gas traders to seek tariff waivers from Beijing for US imports, sources say
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Oil, gas traders to seek tariff waivers from Beijing for US imports, sources say
Feb 6, 2025 3:08 AM

SINGAPORE (Reuters) - Oil and gas traders are likely to seek waivers from Beijing over tariffs that the Chinese government plans to impose on U.S. crude and liquefied natural gas (LNG) imports from February 10, trade sources said on Thursday.

Shortly after tariffs on China imposed by U.S. President Donald Trump took effect on Tuesday, China's Finance Ministry said it would impose levies of 15% on imports of U.S. coal and LNG and 10% for crude oil as well as on farm equipment and some autos, starting on February 10.

Four tankers, carrying 6 million barrels of U.S. West Texas Intermediate (WTI) and Alaskan North Slope (ANS) crude, and two LNG vessels are currently en route to China, data from analytics firms Kpler and LSEG showed.

Companies are expected to apply for waivers for tankers that have already been booked, three oil traders said. However, it would be harder for new deals to receive waivers, two of them said.

Unipec, the trading arm of Asia's largest refiner Sinopec and also the largest Chinese buyer of U.S. oil, has had long-term deals and also participates in pipeline oil business in the United States, another source close to the company said.

"The 10% tariff means Unipec needs to do more swaps, such as sending more oil into Korea and Japan in exchange for whatever these buyers have to swap out for," the person said.

Unipec may also opt to sell more to domestic customers in the U.S., the person added.

Sinopec declined to comment.

At least eight more Very Large Crude Carriers (VLCC) have been booked by firms including Vitol, Gunvor, Occidental, ExxonMobil and Atlantic Trading and Marketing Inc. (ATMI), the trading arm of France's TotalEnergies, Kpler and LSEG data showed.

These companies typically do not comment on commercial activities.

For LNG, the Mu Lan vessel, which picked up a cargo at Corpus Christi on December 16, is set to arrive at the Fujian terminal on Thursday.

Meanwhile, the Wudang vessel loaded at Calcasieu Pass on January 7 and is scheduled to arrive in China between February 9 and 11.

Kpler data shows that both vessels are controlled by PetroChina.

U.S. LNG flows to China are expected to decline sharply, favouring European and alternative Asian destinations once the 15% tariff is in place, Kpler analysts said in a note.

"China is expected to further increase LNG imports from Qatar, Russia, and other suppliers to replace potential declines from the U.S."

U.S. oil shipments en route to China

Vessel Loading date Volume Grade Destination ETA Charterer

(mln

bbl)

Sea Lion December 18 2 West Texas Light Zhanjiang, February 11 Gunvor

Guangdong

Sonangol Huila January 26 1 ANS Qingdao February 14 NA

Ulysses January 17 2 WTI Midland Qingdao March 18 ATMI

Kondor January 24 1 WTI China April 1 NA

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