Some of that crude would instead be going to other buyers in Asia, most likely India and Japan

The flow of oil from the world’s biggest producer to its largest importer is set to thin to virtually zero as a trade war between the two powerhouse economies escalates.

After climbing in recent years, oil shipments from the US to China have been on the decline for much of 2025, thanks to US President Donald Trump’s successive rounds of tariffs at a time when the domestic refining sector is already under pressure. Beijing’s retaliation, raising tariffs on US imports to 84 per cent, plus the latest US hike in duties on China to 125 per cent, have only darkened the picture further.

US flows are by no means vital to China — crude flows from the US to China in the early months of this year added up to roughly 1 per cent of the Asian nation’s total imports, according to data from analytics firm Vortexa Ltd. —  but the collapse of oil purchases is indicative of a wider breakdown of trade relations between the world’s two largest economies.

“With China imposing 84 per cent tariffs on goods from the US, the cost of US crude would be almost double — $51 a barrel more expensive, based on $61 WTI,” said Ivan Mathews, head of APAC analysis for Vortexa. “This makes running US crude uneconomical for Chinese refiners.”

US crude imports to China will “likely dwindle to zero in the coming months if the current tariff levels stay,” he added.

Some of that crude would instead be going to other buyers in Asia. In recent days, Indian refiners have purchased cargoes to take advantage of lower prices, including grades from the US, as have oil processors in Japan.

China, meanwhile, will likely fill the gap with supply from Middle Eastern producers like Oman or the United Arab Emirates, although it could also ramp up its buying of sensitive crude, including from Iran and Russia.

More stories like this are available on bloomberg.com

More Like This

Published on April 10, 2025