Language

Russia's price war takes effect, five U.S. oil and gas companies close, exports to China soar 31%


Classification:

Time:2020-05-10

【Summary】On April 27, Diamond Submarine Drilling Company announced that it had filed for bankruptcy. The fall of this veteran American offshore drilling company also proved how serious the oil crisis the United States is experiencing. In fact, including the well-known American shale oil company that fell before Whiting Oil and other companies, the United States has closed five oil and gas companies in just one month.

On April 27, Diamond Submarine Drilling Company announced that it had filed for bankruptcy. The fall of this veteran American offshore drilling company also proved how serious the oil crisis the United States is experiencing. In fact, including the well-known American shale oil company that fell before Whiting Oil and other companies, the United States has closed five oil and gas companies in just one month.
A Norwegian energy consultancy (RystadEnergy) said 533 U.S. oil exploration and production companies could go bankrupt in 2021 when oil prices fall to $20, and 1100 shale oil companies could go bankrupt when oil prices fall to $10.
Some analysts believe that Russia's price war has achieved results. After its price war with OPEC, it ran into an outbreak of the virus. For a while, international oil prices plummeted. The United States, as a major oil producer, suffered heavy losses, but Russia quickly occupied the Chinese market. Under the double blow of low international oil prices and the virus, the United States has to seek a broader market to rescue its failing companies.
U.S. oil producers are looking for new buyers (much of the oil was previously exported to China), and the White House has taken the lead in liberalizing policies that allow U.S. companies to seek the Eastern market as much as possible. In fact, some American oil companies have already opened the Chinese market. On April 25, media exposure said a U. S. oil tanker (AlaskanNavigator) loaded with crude oil, is sailing from Alaska to China Qinhuangdao. Obviously, the United States hopes that Chinese buyers can alleviate the country's ongoing crisis. The U.S. energy sector has also actively talked to China, hoping that China, which has strong purchasing power, can increase the scale of crude oil purchases, implying that it can buy as much U.S. oil as possible.
In fact, China, which is itself a major energy importer, has indeed increased its oil imports recently. In March, its imports exceeded 41.1 million tons, an increase of 4.5 percent over the same period last year, bringing vitality to the international market to a certain extent. however, the United States does not have much of a share, especially in the temptation of Russia's low prices. Last year, the price of oil sold by Russia to China was cheaper than that of Saudi Arabia, by $2 per barrel, so Russia's crude oil exports to China soared to 31% against the trend! Now that the United States wants to enter the Chinese market and grab more benefits, I am afraid it will have to make more efforts.
(From China Energy Network)

Related Content