What the China Trade Deal Means for U.S. Oil Producers

On the face of it, the Phase One trade deal signed between the U.S. and China last week looks set to provide a big boost to American oil and gas producers who need to develop new export markets. Just how well they fare against exporters who are much closer to the world’s biggest energy importer may depend as much on economics as on politics.

The energy trade section of the deal signed on Jan. 15 commits China to increasing its purchases of American energy products — crude oil, refined products, liquefied natural gas and coal — from levels seen in 2017, a high-point for U.S. exporters before the trade war began to hamper bilateral relationships. The countries agreed that shipments should increase from the 2017 level by no less than $18.5 billion this year and be at least $33.9 billion above the same baseline in 2021.