China’s Sinopec plans to substitute Iranian crude with that of grades from Saudi Arabia and other origins in the Persian Gulf, even as scope of more purchases from the US was limited due to the overall trade and tariff-related bilateral differences, a senior company executive said late-Wednesday.  “The crude imports from the US are taking place regularly, but the buyers here are very concerned over the current tariff disputes,” the Sinopec executive said on the sidelines of the Enmore tankers’ conference in Shanghai.  Crude importers in China are concerned about possible escalation of the US-China tariff dispute that can lead to a slowdown, and were therefore cautious on stepping up imports from the US, the executive said.

There are no special import tariffs currently imposed by China on US crude. However, if the US levies further duties on Chinese goods on top of what has already been imposed, a possibility of China retaliating cannot be ruled out, the executive added.  This concern has prompted the Chinese refiners to keep their exposure to US crude relatively small, he said.  Sinopec’s crude imports from Iran have grounded to a total halt.  “There is no question of buying Iranian crude unless there is a waiver of the US sanctions,” the executive said.

Sinopec has started substituting its purchases of Iranian crude with other origins, he said. While the shift is being done broadly from multiple suppliers in the Middle East, Saudi Arabia is the main source, he added.  At the same time, refiners such as Sinopec are still hoping for a possible US waiver for countries including China, which was until recently one of the main buyers of Iranian crude by volume, the executive said.

Another importer, Japan is trying for such a waiver from the US at the highest level and if successful, it will benefit other large buyers of Iranian crude like China as well, he said, in reference to Japanese Prime Minister Shinzo Abe’s ongoing visit to Tehran.  Sinopec’s refineries have the ability to produce a sufficient amount of low sulfur fuels to meet anticipated demand, once the International Maritime Organization’s new norms for low-sulfur emissions from marine fuels are implemented next year.