Oil markets are bracing for a reshuffle of global trade flows as China threatens to impose tit-for-tat tariffs on imports of U.S. energy products, including crude.
China, which has bought an average 330,000 barrels per day (bpd) of U.S. crude oil this year, is threatening to place a 25 percent tariff on various U.S. commodity exports, including crude oil, although it is so far unclear when such a measure would come in place.
The decision came in response to U.S. President Donald Trump saying he was pushing ahead with hefty tariffs on $50 billion of Chinese imports.
And it triggered an aggressive response by Trump, who on Monday threatened to slap a 10 percent tariff on $200 billion of Chinese goods in addition to the import duties previously announced.
The tariffs could restrict the flow of U.S. barrels going to China – a business now worth almost $1 billion per month
An import duty would make U.S. oil less competitive than other crudes, almost certainly resulting in a sharp fall of Chinese purchases, forcing U.S. oil firms to find other buyers.
In the first three months of this year, U.S. crude made up around 5 percent of China’s total crude imports, according to Chinese customs data.
via Reuters
