New Delhi: India seems to be benefiting from the fact that China has imposed an additional 5 per cent tariffs on US crude oil coming from the United States. To avoid the excess five per cent tariffs, the Chinese consumer company had resold the oil before it reached China’s port. Also, the Indian company Bharat Petroleum (BPCL) has reportedly purchased one of the tankers of crude oil destined for China.
By and large, India has to rely on oil-rich Gulf countries for meeting its oil demands. Unfortunately, imports from leading oil supplying nations such as Iran and Venezuela has come to a grinding halt due to the US-imposed restrictions. Also, India has to now look for other alternatives for its oil imports although the US-China trade war appears to have facilitated for it.
Six days ago, a new round of tariffs between the United States and China worth $200 billion took effect. China has imposed a five per cent increase in tariffs on US crude oil. The additional tariffs that were levied took effect from Sept 1 2019.
Consequently, considering the additional tariffs the US had imposed to come into effect from Sept 1, a few of the oil tankers were sent back before they could dock at China’s ports.
Unipec, a commercial arm of the Chinese state-owned oil company Sinopec, had imported six tankers of crude oil from the United States. There were about twelve million barrels of crude oil in the tankers, although only one of them could enter China’s port before Sept 1. Therefore, to avoid the additional tariffs that would be imposed on the rest of the tankers, China decided to resell the US crude oil carried, before the tankers arrived in Beijing.
China had thus made offers to different oil companies in Asia for the sale of oil. Taking advantage of the situation, India’s Bharat Petroleum Corporation Limited (BPCL), is said to have purchased one tanker. Likewise, South Korea has also obtained US crude oil from China. Furthermore, BPCL is expected to make more purchases and buy the US crude oil, destined for China.
China was one of the leading buyers of the US crude oil, but as the trade war intensified last year, there was a decrease in the US oil imports. Nevertheless, China stepped up the US imports this year. In July, China purchased 1.5 million tons of crude oil from the US. However, the 5 % tariffs levied on the US crude imports would have proved expensive for the Chinese oil companies, but for countries like India, it has turned beneficial.
Since the last two years, India is importing oil from the US after they changed the oil policy. The oil imports from the United States are rising, and the BPCL has signed an agreement with a project from Texas, the US on fuel processing and imports. Statistics show that from the year 2018 to 2019, India has imported 184 thousand barrels per day from the United States. Also, the previous year’s figures showed only forty thousand barrels per day. What’s more, the decrease in China’s oil imports from the US, presented India and other Asian nations with the opportunity to expand oil trade with Washington.