SINGAPORE (ICIS)--The first phase trade deal                    between the US and China will need China to                    heavily expand purchases of US crude oil, and                    that could mean potentially over 60% of China’s                    additional crude imports in 2020 will be                    grabbed by the US, according to ICIS analysts.

Under the phase one deal signed on Wednesday,                    China will increase imports of US energy                    products by $52.4bn in two years, with around                    35% ($18.5bn) for 2020 and some 65% ($33.9bn)                    for 2021.

That gives energy a share of 26% in the total                    $200bn of additional imports China has                    committed to purchase.

Based on customs data, crude accounts for some                    60% of the four types of energy products                    (liquefied natural gas, crude, refined products                    and coal) China imported from the US in 2018.

That said, the burden on China to increase US                    crude imports to fulfill the trade agreement is                    extremely large.

“China may need to import 25m tonnes more US                    oil in 2020 and 46m tonnes more in 2021,”                    according to Li Li, head of crude analytics                    with ICIS.

According to ICIS analytical data, China’s                    crude imports are expected to increase by 40m                    tonnes in 2020, which means that the US will                    take the lion’s share of this increase which                    would otherwise go to different suppliers,                    particularly the Middle East countries.

“That will reshuffle China’s crude import                    landscape,” Li said.

For downstream LPG, China basically shunned US                    imports in 2019 because of the additional                    tariffs.

For 2020, China’s imports of LPG from the US                    are expected to surge sharply to previously                    levels at around 20% if the punitive tariffs                    are cancelled in January or February, according                    to Yan Wang, senior LPG analyst with ICIS.

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Focus article by Fanny Zhang