U.S. oil producers have something else to cheer about in the new ear of crude oil exports. After successfully exporting the first shipment of U.S. crude to Europe, American companies are now looking forward to adding another stamp to their passports; this time in China. In a recent article, Reuters reports that China’s state-run Sinopec Corp has purchased a shipment of U.S. crude oil set for export in March.
Amid the fight for oil exports domination, China’s imports have increased exponentially. This past December, China reached a new record of importing 7.82 million barrels of crude oil a day. In addition, Reuters reports that Sinopec, “Buys more crude oil than almost any other company,” creating an ideal situation for companies looking for long-term trade deals. More importantly, a majority of China’s imports come from unstable areas of the world like Africa and the Persian Gulf, resulting in Sinopec looking, “To improve its supply security by seeking out diverse sources.”
While the first exports to Europe were cause for celebration, U.S. crude oil exports to the Asia-Pacific would create tremendous benefits. According to a recent policy brief by the American Council for Capital Formation (ACCF), George David Banks, ACCF executive vice president and author of the brief, argues for exporting U.S. energy to China to bolster China-U.S. relations. ACCF forecasts that not only would America be able to ease China’s dependence on energy from unstable sources, but a new partnership could help ease growing geopolitical concerns of relationships between China, Russia, and Iran.
“Bolstering the United States’ relationships with foreign superpowers like China is critical to securing a safer and more prosperous future, and one avenue to achieve that goal is through the unfettered trade of U.S. energy,” said Banks. “Our nation’s affordable and abundant energy resources have the potential of bridging cultural differences and generating lasting regional partnerships while easing potential conflicts in the Asia Pacific and across the globe.”
With this shipment, the U.S. is further cementing is position as a global leader in energy and gaining a valuable trading partner.