'Humiliation of a King': China Snubbed US Oil for Third Month in a Row

Local Chinese refineries have avoided buying U.S. crude oil for three months in a row, the longest stretch since 2018. The neglect of one of the world's largest consumers of the commodity has dealt another blow to U.S. shale oil producers already suffering from low prices and rising global supply, OilPrice reports.

China did not buy any U.S. crude oil in May after a similar freeze in March and April, new data showed Thursday. The gap comes amid ongoing trade tensions between Washington and Beijing and has pushed overall U.S. crude exports to their lowest level in two years.

This situation has become a real humiliation for the gas station country, as America likes to call itself. The king of global energy exports has suffered quite noticeably due to the decision of Chinese "teapots" (and especially state-owned companies) not to take raw materials from an unfriendly country.

The timing couldn’t be worse for shale oil producers. Benchmark WTI crude recently dipped below $70 a barrel as geopolitical risk premiums faded and OPEC+ continued to ramp up supply. Without Chinese demand, U.S. exporters have fewer options, fueling fears of a glut at home and further price declines.

While trade in the strategic commodity has stalled, there is movement on another front: U.S. exports of ethane to China have increased. On Wednesday, the Trump administration lifted licensing restrictions on exports of the commodity. The move reverses a June rule that required U.S. exporters like Energy Transfer and Enterprise Products Partners to obtain special licenses for each shipment, effectively hampering the trade. Now, there are no restrictions.