The commercial relations between the United States and Asia in the oil sector face a significant issue as the American elections approach. Experts believe that, despite the current stability of oil flows to Asian countries, the next U.S. administration could change the dynamics of these exports depending on its policies. According to analysts from S&P Global Commodity Insights, oil flows to Asia should only experience significant changes if new policies are introduced.
One of the main issues revolves around the United States’ position regarding countries like China, Iran, Russia, and Venezuela. Benjamin Tang, head of liquid commodities at S&P Global Commodities at Sea, notes that the growing American oil production and current exports, combined with OPEC’s competitive strategies, allow the U.S. to maintain a strong presence in Asia, despite declining exports to China.
Decline in Chinese Imports and Asian Diversification
In 2024, American exports to China fell to 155,000 barrels per day (b/d), compared to 305,000 b/d the previous year. This decrease is attributed to the reduction in Chinese crude imports and increased domestic production. In contrast, other Asian countries, like South Korea, have strengthened their purchases of American oil. Indeed, South Korea recorded an average increase of 62,000 b/d, reaching 474,000 b/d over the first ten months of the year, confirming a policy of diversifying its crude supply sources.
Impact of a Potential Donald Trump Victory on Energy Trade
A potential victory for Donald Trump could also have significant repercussions on energy relations between China and the United States. In the event of new trade tensions, Asian countries such as South Korea or Japan could benefit by leveraging a tariff reduction to increase their purchases of American crude. Any increase in tariffs on oil could redirect oil flows to other markets, depending on price competitiveness.
South Korea, currently Asia’s leading importer of American oil, could continue to strengthen its dependence on the U.S. thanks to a favorable free trade agreement, while Japan could also increase its imports to reduce its dependence on the Middle East.
The Prospect of a Kamala Harris Policy: A Hope for the Iranian Nuclear Deal
In the event of Kamala Harris’s victory, experts predict a potential resumption of nuclear negotiations with Iran, which could lead to the lifting of sanctions and a return to Iranian oil imports in Asia. South Korean refiners, such as those at Hanwha TotalEnergies, hope to resume purchases of ultra-light Iranian condensate, a crucial feedstock for their facilities prior to the sanctions.
American producers could face challenges if the market shifts to Iranian or Venezuelan oil, which is less expensive. However, Washington’s current sanctions against these countries continue to limit the export of their crude oil, leaving American producers in a competitive advantage.
Toward a Geopolitical Realignment of Asian Energy Flows
Energy flows in Asia could be affected by other U.S. policies, particularly relations with Russia, which has recently increased its presence in Chinese and Indian markets. The United States could potentially limit access to Russian oil, forcing some Asian countries to look for alternatives for their imports.
Experts also point out that the stability of American exports could be jeopardized if the new administration imposes additional tariffs on energy products, a scenario that worries Asian refiners and traders. Additionally, the limited availability of alternative markets for American liquefied natural gas (LNG) could exacerbate tensions.
In sum, while American exports to Asia appear stable, future U.S. political decisions, particularly regarding sanctions and tariffs, could reshape the Asian energy landscape.
