China is falling behind in its promise to spend $52.4 billion buying U.S. energy over two years -- even as it is filling its storage tanks with Russian and Saudi crude -- independent oil producers warned the Trump administration Tuesday.
The American Exploration and Production Council urged the administration in a letter to U.S. Trade Representative Robert Lighthizer to get tough with China.
“China has only purchased a de minimis amount of U.S. crude in the first months of 2020, while it has increased purchases of crude oil from Saudi Arabia and Russia,” council chief executive Anne Bradbury said. “Rather than increasing imports from countries like Russia and Saudi Arabia, the Chinese government must take the necessary steps to remain in good standing with the U.S. as a trusted trade partner.”
The effort marks a shift for oil companies and their congressional allies struggling to endure an epic collapse in crude demand that has sent prices plummeting to record lows. For weeks, oil industry leaders and the Trump administration focused attention on Saudi Arabia and Russia’s role in boosting production. And industry leaders previously expressed doubts about China’s ability to fulfill the energy purchase commitments it made as part of the trade pact with Trump in January.
Now that Russia, Saudi Arabia and other major global oil producers have agreed to pare production -- and Trump looks for ways to help domestic drillers -- industry advocates are pivoting to emphasize how Chinese purchases can help mop up the U.S. crude glut.
“We are at a critical time for our industry,” Bradbury told Lighthizer. “Every measure possible must be taken to alleviate crude oversupply and diminishing storage capacity issues that U.S. independent producers are facing -- especially holding China to their U.S. trade obligations.”
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