China will buy more U.S. crude oil, says Energy Secretary Wright
China is set to increase its crude oil imports from the United States as the two largest economies in the world are natural trade partners in energy, according to U.S. Energy Secretary Chris Wright in an interview with CNBC.
With China being the largest oil importer globally and the U.S. being the biggest producer, there is a natural synergy in energy trade between the two countries, Wright explained.
Due to the ongoing blockade of the Strait of Hormuz by Iran, China, which heavily relies on the Middle East for oil imports, is looking to diversify its sources. Wright anticipates a growth in China’s oil imports from the U.S. in the near future.
President Donald Trump recently stated that China has agreed to purchase more oil from the U.S., with plans to import from Texas, Louisiana, and Alaska. However, China has not officially confirmed this agreement.
Hormuz’s Decline in Significance
Wright predicts a decrease in the importance of the Strait of Hormuz following Iran’s blockade, emphasizing that this disruption is a one-time card that Iran can play.
The Gulf Arab states are already making plans to build alternative pipelines to bypass Hormuz and ensure uninterrupted energy supply. The United Arab Emirates, for instance, is expediting the construction of a new pipeline to avoid reliance on the strait.
Despite the potential decrease in importance of Hormuz as an energy route, the energy production and supply of the nations in the region will remain significant, according to Wright.
