China's trade tariffs could direct US crude exports lower in 2025

An emerging trade war between the United States and China could drive US crude exports lower in 2025 for the first time since the pandemic by reducing access to the Chinese market, according to analysts. 

That outlook reflects a potential unintended consequence of President Donald Trump's protectionist policies, running counter to his administration's vow to maximize already record-high US oil and gas production. 

The US has grown into the world's third-largest exporter behind Saudi Arabia and Russia since it lifted a 40-year federal ban on exports of domestic oil in 2015. While US crude exports grew only slightly in 2024, the last time they fell was in 2021, after the Covid-19 outbreak slashed global energy demand. 

"International demand for US crude may be peaking out, and this could only further accelerate that," said Matt Smith, an analyst at Kpler. 

Rohit Rathod, a senior analyst with ship tracking firm Vortexa, said he expected total US oil exports to slip to 3.6 million barrels per day in 2025 from 3.8 million bpd in 2024, as Chinese tariffs keep some US oil grades at home. 

China consumes around 166,000 barrels of US crude daily, roughly 5 per cent of all US export cargoes. Some of that could stay on US shores or be diverted to other markets after Beijing announced retaliatory tariffs this week. 

The fall in exports would most likely be made up of medium density types of oil with a higher sulfur content, such as Mars and Southern Green Canyon that are considered medium-sour grades. Those types made up about 48 per cent of the US crude imported by China last year. 

Such grades are ideal for US refineries and could easily find buyers domestically - particularly if the United States follows through on its threats to impose new tariffs on Canadian and Mexican oil, analysts said. 

"Medium sours are welcome barrels in the US Gulf Coast. 

Refiners need it," Rathod said. 

Most of the rest of China's crude imports from the US were lighter density, lower-sulfur types, such as West Texas Intermediate, which are known as light, sweet grades. 

That type of oil could be diverted to European and Indian refiners at competitive prices, analysts said. 

The Louisiana Offshore Oil Port handled nearly half of all exports to China last year, according to Kpler. 

The company was not immediately available for comment. 

Another 25 per cent of US exports to China came from Enbridge's Ingleside, Texas, facility near Corpus Christi, Kpler data showed. 

Enbridge's facility will see very little impact since less than 15 per cent of it's historical volumes have gone to China, said Phil Anderson, a senior Vice President at the company. 

"The market is very liquid globally for light crude," he said. 

Among the top sellers of US crude to China is Occidental Petroleum, which sold at least 13 cargoes of light, sweet WTI Midland there in 2024, according to Kpler. 

Occidental did not immediately reply to a request for comment. 

For China, the impact is likely muted as US imports accounted for just 1.7 per cent of the country's total crude imports in 2024, worth about $6 billion, according to Chinese customs data, and down from 2.5 per cent in 2023. 

China had increased imports from Canada by about 30 per cent last year to over 500,000 bpd, thanks to the expansion of the Trans Mountain pipeline. China's appetite for US oil has also diminished in recent years due to discounted Russian and Iranian oil. 

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