China Slashes US Oil Imports, Turns to Canadian Supply Amid Trade Tensions

China has drastically reduced its imports of US crude oil by 90%, effectively bringing purchases to near zero. This development comes as Chinese oil refineries pivot toward record levels of oil imports from Canada, according to a report by Bloomberg that references data from industry analysts and traders.

The sharp decline in US oil imports is primarily attributed to the escalating trade conflict between Beijing and Washington. Following the imposition of tariffs of up to 145% on Chinese goods by the US, China retaliated with tariffs of 84%. These punitive measures rendered American oil economically unfeasible for Chinese refineries, inflating costs by $51 per barrel. In response, China has turned to Canadian oil, particularly the Western Canadian Select grade, which has gained favor due to its lower prices and reliable availability.

However, this pivot raises concerns among experts about a potential decrease in Chinese purchases of Russian oil, which reached a record 108.5 million tons in 2024, accounting for 20% of China’s total imports. As China restructures its supply chains, the global oil market remains unstable, largely due to US sanctions targeting Russia and Iran. In light of these disruptions, China has initiated emergency oil purchases from the Middle East, Africa, and South America, leading to increased prices for Murban crude and reduced profit margins for Asian refineries.

For Russia, which has emerged as a crucial oil supplier to China, the evolving landscape presents new risks. Should Beijing continue diversifying its oil sources, the proportion of Russian grades like ESPO and Sokol could diminish, especially as logistical challenges and sanctions mount.

In March 2025, China reportedly imported a record 1.7 million barrels per day of Russian oil, redirecting supplies from India, which had previously abandoned the Sokol grade due to sanctions. Yet, in July 2024, imports from Russia saw a 7.4% decline due to production cutbacks at Chinese refineries.

Canadian crude’s appeal lies in its competitive pricing; in April 2025, the price of Western Canadian Select fell to $65 per barrel, making it 20% cheaper than Brent crude. This price advantage positions Canadian oil as a viable alternative to Russian grades, despite the complexities of transportation logistics. According to Vortexa, US oil supplies comprised only 1% of China’s total imports in 2025, facilitating Beijing’s transition away from American crude in favor of Canadian and UAE oil sources.