The 5-percent tariffs China imposed on U.S. crude oil imports two months ago could challenge the growth prospects of overall exports, economists gathered for an industry event have warned.
"China's the big growth in demand. The whole focus of U.S. exports will eventually somehow have to get back to China," said the chief economist of Phillips 66, Horace Hobbs, as quoted by S&P Global Platts, during the US Association for Energy Economics conference.
Talk about Chinese tariffs on U.S. oil imports began pretty much as soon as the conflict began. Even the anticipation of tariffs made a lot of Chinese refiners stop buying U.S. crude as they waited to see how the situation would develop. For three months last year, China imported zero barrels of U.S. oil, and it did the same in January.
Since then, imports have been restarted, and over the first nine months of this year, United States companies have been exporting oil to China at a daily rate of 169,000 bpd. That’s down from a peak of 469,000 bpd, which was reached in March last year. Related: OPEC Braces For Drastic Drop In Oil Demand
And it’s not just oil that is affected, either. Liquefied natural gas and liquefied petroleum gas have also suffered the fallout of the war.
"We certainly would have done more business with China had the trade war not been on the forefront," Cheniere Energy’s VP for corporate development and strategy Oliver Tuckerman said during the conference.
What’s worse, however, is that the prospects are not particularly good. Industry executives seem to believe that even if President Trump does not win a second term in office, his successor might be unwilling to end the trade dispute with China if it would mean making major concessions.
"We might be looking at the beginning of endless economic wars," S&P Global Platts quoted the managing director of ClearView Energy Partners as saying.
By Irina Slav for Oilprice.com
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