A new US-China trade truce has come at an opportune moment for US oil producers. China, the world’s top importer, is in the midst of a “buyers’ strike” against Russian crude, creating a significant supply gap.
The strike is a reaction to Western sanctions. State firms (Sinopec, PetroChina) are canceling cargoes due to US sanctions on Russian producers. Private “teapots” are terrified after the Yulong blacklisting.
This has caused ESPO crude prices to plunge, hitting Moscow’s finances.
The key problem is uncertainty. A Trump-Xi summit was silent on the oil issue, leaving refiners in a “muddle.”
While the US could benefit, the lack of clarity from the summit is a major issue, as is a domestic problem of “teapot” refiners running low on import quotas.