China will buy more U.S. crude oil, says Energy Secretary Wright
China will increase its imports of crude oil from the United States because the world’s two largest economies are natural trading partners for energy, Chris Wright told CNBC on Friday.
The world’s largest oil importer is China, and the largest producer is the USA. “There’s a natural energy trade there,” the U.S. Secretary of Energy told CNBC’s Brian Sullivan in an interview in Port Arthur, Texas.
China relies heavily on the Middle East for its oil imports. Exports from the Persian Gulf have been largely disrupted for weeks due to Iran’s blockade of the Strait of Hormuz. Beijing has huge strategic reserves that have helped it weather disruptions so far.
“I suspect we will see an increase in oil imports from the United States,” Wright told CNBC.
China and other Asian buyers will eventually buy more oil from Alaska as the Trump administration increases production in Alaska, Wright said. For now, he said, Beijing will import more oil from the U.S. Gulf Coast.
President Donald Trump previously told Fox News that China has agreed to buy more oil from the United States. Beijing has so far not confirmed whether such an agreement exists with the United States.
In his statement to Fox News, Trump said, “They agreed to buy oil from the United States, they will go to Texas, and we will start sending Chinese ships to Texas, Louisiana and Alaska.” The US president met with President Xi Jinping for a summit in Beijing this week.
Ormuz will lose its importance: Wright
Wright said that the importance of Hormuz will decrease due to Iran’s blockade of the sea route. “This is a card you can play once,” the energy minister said of Iran’s blockage in the strait.
Before the US and Israel attacked Iran on February 28, approximately 20 percent of the world’s oil supply was passing through the sea route. In response, Iran’s blockade of Hormuz triggered the largest energy supply disruption in history and deeply affected the economies of the Gulf Arab states.
Gulf states will build more pipelines to bypass Hormuz after the war, Wright said. The United Arab Emirates is currently planning to accelerate the construction of a new West-East pipeline that will bypass Hormuz.
“There will be other ways for energy to come out of the Persian Gulf,” Wright said. “We will see the importance of the Strait of Hormuz diminish, but we will see that the importance of these countries’ energy production and energy supply does not diminish.”
