China customs duties on American oil: Small expectations for their effectiveness as US exports have declined

The first round of sanctions against the American was accepted with “grumbles” while investors speculate that this move is unlikely to shake U.S. crude exports, according to a Bloomberg report. After China targeted the oil markets from the US with 10% return rates, the forward market took an initial dive – but most of these losses have already been recovered. The reason for the weak reaction is that American oil exports to China have recently passed to a second degree against other buyers who absorb more barrels. CORVERSE Last year, China introduced nearly 180,000 barrels of American oil a day, representing less than 5% of America’s total oil exports. This volume can be easily absorbed by other refineries in Europe and Asia, including South Korea and Japan, according to investors. South Korea is already the second largest American crude buyer, taking nearly half a million barrels a day. American exports to China, which peaked at around 450,000 barrels a day in 2020, have weakened as the Asian country struggles to revitalize its economy and as its turn towards electric vehicles weakens demand for motor fuel. Chinese importers have also turned to other suppliers. Preliminary evidence suggests that China took 40% less American slow in 2024, while increasing markets from Russia and Iran before the last round of sanctions disrupted flows. As China seeks to continue to replace American oil, it can utilize supplies from places such as the Middle East, Brazil and Guyana as Chinese duties enter into force on February 10. But after Trump gave last-minute suspension to tariffs in both Canada and Mexico, President Shi Jinping may also seek negotiations.