China has avoided buying U.S. crude oil for three straight months—the longest dry spell since 2018—delivering another hit to American shale producers already struggling with weak prices and rising global supply.
According to new U.S. Census data released Thursday, China bought no American crude in May, following a similar freeze in March and April. The gap comes amid ongoing trade tensions between Washington and Beijing and has dragged total U.S. crude exports to their lowest level in more than two years.
The timing couldn’t be worse for shale producers. Benchmark WTI crude recently slipped back below $70 per barrel as geopolitical risk premiums faded and OPEC+ continues to ramp up supply. Without Chinese demand to soak up barrels, U.S. exporters are left with fewer options—raising fears of a glut in the domestic market and further downward pressure on prices.
While crude trade has stalled, there’s movement on another front: ethane. On Wednesday, the Trump administration lifted licensing restrictions on U.S. ethane exports to China. The move reverses a June rule that required U.S. exporters like Energy Transfer and Enterprise Products Partners to secure special licenses for every shipment, effectively bottlenecking the trade of natural gas liquids.
The Commerce Department’s decision reopens a critical export stream. China accounted for 47% of all U.S. ethane exports in 2024, and the resumption of trade is expected to reverse recent EIA forecasts of declining volumes. Ethane is used primarily for producing ethylene—a key component in plastics and petrochemicals.
Still, the return of ethane flows offers little comfort to crude producers. With China continuing to snub U.S. oil even as it ramps up imports from Iran and Russia, shale drillers face a tough path ahead unless relations thaw—or prices climb.
By Julianne Geiger for Oilprice.com
