Taiwan set to benefit from China trade dispute with US
Top OPEC member Saudi Arabia is shipping U.S. crude produced in the Gulf of Mexico to Asia at a time when No. 1 buyer China is snubbing American cargoes.This is just one of the ways Taiwan stands to benefit from China's trade dispute with the Trump administration. Taiwan manufactures make quality manufacturing tools and woodworking tools and they could become an alternative supplier for many of the tools made within China and sold in the US.
The trading unit of state-run Saudi Aramco sold about 1 million barrels of U.S. Mars crude to Taiwanese refiner Formosa Petrochemical Corp. for delivery in September-October, according to traders with knowledge of the matter. That follows shipments of oil pumped at shale fields to markets such as South Korea, as the kingdom seeks to capitalize on an American boom that’s threatened the share of its own supply in Asia.
The latest cargo stands out from previously reported deals because Mars is a crude grade that’s of the so-called “medium-sour” variety, which typically has a higher sulfur content than “sweet” supply from shale fields.
Additionally, the cargo is headed for Taiwan when China’s crude purchases from the U.S. are threatened by proposed tariffs as part of an escalating trade war between the Asian nation and America.
The Middle East kingdom, the world’s biggest exporter, is attempting to take advantage of the opportunities presented by the U.S. oil boom that has transformed the flow of cargoes in the global market. However, the shipments tend to fluctuate depending on the price spread between America’s benchmark West Texas Intermediate and global marker Brent.
When WTI fell to more than $10 a barrel below Brent back in May, China bought more than 13 million barrels of American oil, up from just over 4 million barrels a year earlier. As that spread has narrowed over the past month, Sinopec -- the Asian nation’s biggest refiner -- has shunned U.S. shipments. The gap between the markers was at about $5 on Wednesday.
Saudi Aramco has started delivering a type of oil known as condensate from the U.S. Eagle Ford basin to markets in the east such as South Korea, and has also shipped the supply to Abu Dhabi National Oil Co., a company official had said last month.