China falling further behind US trade deal energy targets, even as crude oil imports soar to record volumes

China bought record volumes of crude oil in May, but analysts do not expect the US to have been the major provider, despite lofty targets in the phase one trade deal

China is significantly behind on ‘overly ambitious’ energy import targets, but insiders on both sides of the deal suggest agricultural goods are being given a priority

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For the first five months of 2020, China imported US$600 million worth of covered energy products against a target of US$10.5 billion, according to research from AB Bernstein. Photo: AP

Published: 5:28pm, 9 Jun 2020Updated: 10:54pm, 9 Jun 2020

China imported record volumes of crude oil in May, but despite the terms of the phase one trade deal with the United States requiring it to buy huge volumes of energy products, very few of the bumper shipments are expected to have been American.

Instead, China’s “opportunistic buyers” went on a shopping spree for cut-price oil from the Middle East and Russia to bolster its national reserves, or to just turn a quick profit, even as US oil prices briefly turned negative for the first time in their history, analysts said.

That means that almost halfway through 2020, China is falling further behind the deal’s “overly ambitious” purchasing targets for American energy products, including natural gas and oil, even as it continues to buy record volumes of pork and ratchets up shipments of politically expedient soybeans, crucial if US President Donald Trump is to win the farm state vote in November’s general election.

As part of the trade deal, China has agreed to increase energy product purchases by US$52 billion over the next two years, which would average out to US$2.2 billion per month for 2020.

A full breakdown of May’s imports released later this month is expected to show some US purchases, but nothing close to that target. Total China’s imports of all American goods fell by 13.5 per cent in May in value terms, despite the obligations of the phase one deal.