China Shuns US Crude for Third Straight Month

China Shuns US Crude for Third Straight Month

China’s decision to avoid purchasing US crude for the third straight month has dealt a fresh blow to shale drillers, who are already grappling with lower oil prices.

According to US Census data released on Thursday, the world’s biggest oil importer bought no American crude in May, following zero purchases in both March and April.

The absence of Chinese buying sent US overseas oil sales tumbling to the lowest in two years, further exacerbating the challenges faced by shale drillers.

These producers partly depend on foreign demand to keep drilling and avoid US markets from becoming oversupplied.

The current situation is attributed to the ongoing trade dispute between the US and China, which has led to tariffs being imposed on several countries, including China.

Chinese goods currently face levies of roughly 55 percent, making it difficult for US crude exporters to compete in the Chinese market.

Benchmark West Texas Intermediate prices have recently pulled back below $70 a barrel as geopolitical tensions ease and OPEC+ considers bringing back more production.

This has further squeezed shale drillers, who are struggling to maintain profitability in a challenging market environment.

The prolonged absence of Chinese buying is a significant concern for US shale producers, who rely heavily on foreign demand to support their operations.

With no immediate resolution to the trade dispute in sight, shale drillers may need to reassess their strategies to remain competitive in a rapidly changing market