SINGAPORE: China will import record volumes of US oil and is likely to ship more US soy after Beijing signalled to state-run refiners and grains purchasers they should buy more to help ease tensions between the two top economies, trade sources said on Wednesday.

China pledged at the weekend to increase imports from its top trading partner to avert a trade war that could damage the global economy. Energy and commodities were high on Washington’s list of products for sale.

As the two sides stepped back from a full-blown trade war, Washington neared a deal on Tuesday to lift its ban on US firms supplying Chinese telecoms gear maker ZTE Corp, and Beijing announced tariff cuts on car imports.

But US President Donald Trump indicated on Wednesday that negotiations were still short of his objectives when he said any deal would need a “different structure”.

China is the world’s top importer of both oil and soy, and more US shipments will help it meet rising domestic consumption. The imports would also contribute to cutting China’s trade surplus with the United States, as demanded by Trump.

Asia’s largest oil refiner, China’s Sinopec will boost crude imports from the US to an all-time high in June as part of Chinese efforts to cut the surplus, two sources with knowledge of the matter said on Wednesday.

Sinopec’s trading arm Unipec has bought 16 million barrels, or about 533,000 barrels per day, of US crude to load in June, they said, the largest volume ever to be lifted in a month by the company and worth about $1.1 billion.

“The government has encouraged us to lift more US crude,” one of the sources said.

US crude exports have risen rapidly as output from shale fields hits record highs and driven down the cost of US oil relative to similar grades worldwide.

Published in Dawn, May 24th, 2018