China's retaliatory tariffs on crude likely to push US exports lower in 2025

China’s retaliatory tariffs on the United States may cause U.S. oil exports to decline in 2025 for the first time since the COVID-19 pandemic, after growth plateaued last year.

China's retaliatory tariffs on the United States may cause U.S. oil exports to decline in 2025 for the first time since the COVID-19 pandemic, after growth plateaued last year.

Exports of U.S. crude have surged more than 10 times since it lifted a 40-year federal ban on the export of domestic oil in 2015. That has helped United States become the world's third-largest exporter behind Saudi Arabia and Russia, blunting the global impact of production cuts by the Organization of the Petroleum Exporting Countries and its allies.

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While China's appetite for U.S. oil has diminished in recent years thanks to discounted Russian and Iranian oil, exports were 166,000 barrels per day in 2024, accounting for nearly 5% of all U.S. crude exports, according to ship-tracking data from Kpler.

U.S. crude export growth stalled in 2024, rising just 0.6% or 24,000 bpd in 2024, to average 3.8 million bpd, according to Kpler, as U.S. companies kept a lid on shale production amid worries about global demand.

Calling China's share of U.S. exports "not an insignificant amount", Matt Smith, an analyst at Kpler, also said international demand for American crude exports may be peaking "and China's retaliatory tariffs could only further accelerate that."

About 48% of the U.S. crude imported by China were medium density types with a higher sulfur content, such as Mars and Southern Green Canyon that are considered medium-sour grades. That type of crude is ideal for U.S. refineries to process and could easily find buyers domestically, particularly if the U.S. imposes tariffs on Canada and Mexico, analysts said.