Analysts predict that emerging trade tensions between the United States and China could lead to a decline in U.S. crude oil exports in 2025, marking the first drop since the pandemic. This potential downturn is attributed to reduced access to the Chinese market, countering the previous administration’s commitment to maximizing U.S. oil production.
Key Highlights:
Current Export Landscape:
The U.S. has ascended to become the world’s third-largest crude exporter, trailing only Saudi Arabia and Russia, following the lifting of a 40-year ban on oil exports in 2015.
While U.S. crude exports saw only a slight increase in 2024, the last significant decline occurred in 2021 due to the COVID-19 pandemic.
Projected Decline:
Rohit Rathod, a senior analyst at Vortexa, forecasts that total U.S. oil exports will drop to 3.6 million barrels per day (bpd) in 2025, down from 3.8 million bpd in 2024, primarily due to Chinese tariffs.
China currently consumes about 166,000 barrels of U.S. crude daily, accounting for roughly 5% of all U.S. export cargoes.
Types of Oil Affected:
The decline in exports is expected to primarily impact medium density oils with higher sulfur content, such as Mars and Southern Green Canyon, which constituted about 48% of U.S. crude imports by China last year.
These medium-sour grades are essential for U.S. refineries and can easily find domestic buyers, especially if new tariffs on Canadian and Mexican oil are implemented.
Market Dynamics:
Lighter density, lower-sulfur oils, such as West Texas Intermediate (WTI), could be redirected to European and Indian markets at competitive prices.
The Louisiana Offshore Oil Port was responsible for nearly half of all U.S. exports to China last year, while Enbridge’s Ingleside facility near Corpus Christi contributed about 25% of exports, with minimal impact anticipated from the tariffs.
China’s Import Trends:
U.S. crude imports represented just 1.7% of China’s total crude imports in 2024, valued at approximately $6 billion, down from 2.5% in 2023.
China has increasingly sourced oil from Canada, boosting imports by about 30% last year, largely due to the expanded Trans Mountain pipeline. Additionally, China’s demand for U.S. oil has waned due to cheaper options from Russia and Iran.