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China's tariffs on U.S. oil would disrupt $1 billion monthly business

  

Category:  News & Politics

Via:  kavika  •  6 years ago  •  61 comments

China's tariffs on U.S. oil would disrupt $1 billion monthly business

S E E D E D   C O N T E N T



With tariffs to go into effect tomorrow, July 6th, this tariff on fuel may come as a surprise to many Americans. But China has increased their purchase of fuel from the US. In 2017 it was $100 million per month, it's now $1 billion per month...Additionally other forms of fuel, LNG, coal will have tariffs soon.

A coal ship destined for China has been diverted to Singapore. No word yet as to why but it would see that it has something to do with the coming tariffs. 

In an escalating spat over the United States’ trade deficit with most of its major trading partners, including China, U.S. President Donald Trump said last week he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.

China said Friday it would retaliate by slapping duties on several American commodities, including oil.

Investors expect the spat to come at the expense of U.S. oil firms, pulling down the share prices of ExxonMobil and Chevron by 1 to 2 percent since Friday, while U.S. crude oil prices fell by around 5 percent.

“This escalation of the trade war is dangerous for oil prices,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

“Let’s hope cooler heads prevail, but I’m not overly optimistic,” he added.

To view a graphic on Russia vs Saudi vs U.S. oil production, click:   reut.rs/2JAw1dG

The dispute between the United States and China comes at a pivotal time for oil markets.

Following a year and a half of voluntary supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC), as well as the non-OPEC producer Russia, oil markets have tightened, pushing up prices.

The potential drop-off in American oil exports to China would benefit other producers, especially from OPEC and Russia.

FILE PHOTO: A booth of U.S. major ExxonMobil is seen at the China (Dongying) International Petrochemical Trade Exhibition in Dongying, Shandong province, China May 29, 2018. Picture taken May 29, 2018. REUTERS/Chen Aizhu/File Photo

The OPEC kingpin Saudi Arabia and Russia indicated on Friday they would loosen their supply restraint and were starting to raise exports.

A cut in Chinese purchases of U.S. oil may also benefit Iran’s sales, which Washington is trying to curb with new sanctions it announced in May.

“The Chinese may just replace some of the American oil with Iranian crude,” said John Driscoll, director of consultancy JTD Energy Services.

“China isn’t intimidated by the threat of U.S. sanctions. They haven’t been in the past. So in this diplomatic spat they might just replace U.S. crude with Iranian oil. That would obviously infuriate Trump,” he said.

To view a graphic on U.S. crude oil exports to China, click:   reut.rs/2ymEr7m








BOOMING BUSINESS


China’s aggressive riposte to Trump took some in the industry by surprise.

U.S. crude exports to China have been rising sharply, thanks to a production surge in the past three years that was a welcome alternative to make up for the cut in supplies from OPEC and Russia.

“We’re caught by surprise that crude oil is on the list,” said an official with a Chinese state oil major, asking not to be named as he was not authorized to speak to media.

“We were actually preparing to raise imports according to an earlier government line,” he added, referring to a Beijing policy enacted earlier this year to help reduce the U.S. trade deficit with China.

U.S. oil exports, which have been surging thanks to a sharp increase in production in the past three years, were seen as a viable alternative to make up for the cut in supplies from OPEC and Russia.


Shipping data in Thomson Reuters Eikon shows that U.S. crude oil shipments to China have soared in value recently, jumping from just $100 million per month in early 2017 to almost $1 billion per month currently.

The threatened tariff would make U.S. oil more expensive versus supplies from other regions, including the Middle East and Russia, and likely disrupt a business that has soared recently.

“With Trump’s politics, we’re in a world of re-aligning alliances. China will not just swallow U.S. tariffs,” said Driscoll.

“This is tit-for-tat petroleum diplomacy,” he added. “The OPEC/non-OPEC cartel is the big beneficiary of all this oil diplomacy, as it will squeeze global spare oil capacity and likely push up crude prices.”

To view a graphic on ExxonMobil & Chevron share prices, click:   reut.rs/2MyQUrv

(This version of the story has been refiled to fix graphic links.)





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Kavika
Professor Principal
1  seeder  Kavika     6 years ago

An area that I don't believe that many Americans thought about in a trade war. 

I'm sure that there will be a tariff on LNG and coal as well.

 
 
 
Greg Jones
Professor Participates
1.3  Greg Jones  replied to  Kavika @1    6 years ago

Are we talking about the existing old tariffs or the new ones?

 
 
 
Kavika
Professor Principal
1.3.1  seeder  Kavika   replied to  Greg Jones @1.3    6 years ago

The tariffs by China would be new ones as are the tariffs by the US.

 
 
 
Bob Nelson
Professor Guide
2  Bob Nelson    6 years ago

I have confidence.

Our President is playing three-dimensional chess!

...

     ... we're fucked..

 
 
 
Kavika
Professor Principal
2.1  seeder  Kavika   replied to  Bob Nelson @2    6 years ago
... we're fucked..

In spades...

 
 
 
Kavika
Professor Principal
2.1.1  seeder  Kavika   replied to  Kavika @2.1    6 years ago

Might be more interest in the article tomorrow when the shit hits and fan.

 
 
 
TTGA
Professor Silent
2.1.2  TTGA  replied to  Kavika @2.1    6 years ago
... we're fucked..

Only if you work for an oil company.  It truly breaks my heart that we won't be shipping our surplus oil out to China.  If that happens, and we end up with a surplus in this country, the price of oil (and, by extension, gasoline) would likely go down.  I always feel bad when oil companies have to sell at lower prices, just like I feel bad when bank robbers or car jackers get shot by their victims.

 
 
 
Texan1211
Professor Principal
2.1.3  Texan1211  replied to  TTGA @2.1.2    6 years ago

Some people are funny---thinking we can't survive Trump, but somehow forgetting that we managed to survive a civil war started by Democrats!

 
 
 
Kavika
Professor Principal
2.1.5  seeder  Kavika   replied to  Texan1211 @2.1.3    6 years ago

What does you comment have to do with the article Texan...Please address the article or don't comment on it at all. 

Do not try to derail the article.

 
 
 
Texan1211
Professor Principal
2.1.6  Texan1211  replied to  Kavika @2.1.5    6 years ago

Is the following comment as off topic as mine?

or is it allowed because it says "Fuck Trump"?

Not to worry--I won't post anything else remotely off-topic.

I hope you hold all to the same standard.

 
 
 
Kavika
Professor Principal
2.1.7  seeder  Kavika   replied to  TTGA @2.1.2    6 years ago
Only if you work for an oil company.  It truly breaks my heart that we won't be shipping our surplus oil out to China.  If that happens, and we end up with a surplus in this country, the price of oil (and, by extension, gasoline) would likely go down.  I always feel bad when oil companies have to sell at lower prices, just like I feel bad when bank robbers or car jackers get shot by their victims.

I'm no fan of the oil companies TTGA, but I am a fan of the US. This is an area that we are finally starting to depend less and less on foreign oil. These sales to China are helping out our balance of trade, not hurting it. And we do ship product to other countries not only China. 

China, IMO, if they do put tariffs on US crude they will start buying more from Iran, simple as that. 

It worth noting that China has one investment in an off shore oil field in Brazil and is in the process of working with a partner on a second. They are also on the verge of finalizing a deal with a Brazilian company that will give them ownership in a oil processing facility. They are not sitting on their asses. 

In addition they have signed new contract with the Russians to almost double the amount of fuel they are purchasing from them and it doesn't have to move via ocean carrier, but through a pipeline from Russia to China. 

It the ''long game'' that counts, not just this week or the next election period.

 
 
 
Kavika
Professor Principal
2.1.8  seeder  Kavika   replied to  Texan1211 @2.1.6    6 years ago

Perhaps if you scroll down you'll see a comment to everyone regarding staying on topic. 

 
 
 
Texan1211
Professor Principal
2.1.9  Texan1211  replied to  Kavika @2.1.8    6 years ago

I did see that after I finished posting .

 
 
 
Bob Nelson
Professor Guide
2.1.10  Bob Nelson  replied to  Kavika @2.1.7    6 years ago
China, IMO, if they do put tariffs on US crude they will start buying more from Iran, simple as that.

International trade should be win-win. Trump is making it lose-lose.

 
 
 
Greg Jones
Professor Participates
2.1.11  Greg Jones  replied to  Bob Nelson @2.1.10    6 years ago
Trump is making it lose-lose.

Explain in detail how Trump is making it lose-lose.

 
 
 
Bob Nelson
Professor Guide
2.1.12  Bob Nelson  replied to  Greg Jones @2.1.11    6 years ago

Jawohl Herr Obersturmbahnführer!!

Rather than make summations, why don't you answer the very simple question I asked you several hours ago?

 
 
 
MrFrost
Professor Expert
2.2  MrFrost  replied to  Bob Nelson @2    6 years ago

Please, he couldn't play one dimensional checkers. 

 
 
 
bbl-1
Professor Quiet
2.3  bbl-1  replied to  Bob Nelson @2    6 years ago

A man that does not read, does not know how to play chess.

 
 
 
Tessylo
Professor Principal
2.3.1  Tessylo  replied to  bbl-1 @2.3    6 years ago

Deleted

 
 
 
Greg Jones
Professor Participates
2.4  Greg Jones  replied to  Bob Nelson @2    6 years ago

What should we do about the trade deficits? It's a long time problem that needs to be solved

 
 
 
Bob Nelson
Professor Guide
2.4.1  Bob Nelson  replied to  Greg Jones @2.4    6 years ago
What should we do about the trade deficits? It's a long time problem that needs to be solved.

Why should we do anything?

I mean that question literally.

Giggle

The BOP is stable, around $40-$50 billion. GDP is about $18.5 trillion. So the BOP deficit is about two-tenths of one percent of GDP.

"If it ain't broke, don't fix it!"

 
 
 
devangelical
Professor Principal
3  devangelical    6 years ago

My tax cut is coming up way short at the gas pump and it's starting to look like it's going to get a lot worse. Fuck trump.

 
 
 
Texan1211
Professor Principal
3.1  Texan1211  replied to  devangelical @3    6 years ago

WTF do tax cuts and gas prices have to do with one another?

 
 
 
MrFrost
Professor Expert
3.1.1  MrFrost  replied to  Texan1211 @3.1    6 years ago
WTF do tax cuts and gas prices have to do with one another?

Well, lets explain it in terms you will understand. Trump cut taxes and the right wing screamed how great it was, right? "I am getting more money!!!!!!!!!!"... Remember that? Now, lets say you are getting an extra $50.00 bucks a month because of the tax cuts...(you aren't, but it's a nice round number). Now lets say your monthly gas bill is $130.00. The price of gas goes up, (like here, it's almost doubled), and now your gas bill is $200.00 a month. That extra $50.00 a month you were so proud of? Gone, because trump fucked you out of it with his retarded trade war....

WINNING!!!!!!!!!!!!!!!!!!

 
 
 
Texan1211
Professor Principal
3.1.2  Texan1211  replied to  MrFrost @3.1.1    6 years ago

Um, tax cuts and oil prices are unrelated.

I have been told to stay on topic, and from what I can tell, tax cuts are NOT on topic.

 
 
 
MrFrost
Professor Expert
3.1.3  MrFrost  replied to  Texan1211 @3.1.2    6 years ago
Um, tax cuts and oil prices are unrelated.

They are if you have to use YOUR tax cut to purchase that oil! Jesus, this isn't rocket science! 

 
 
 
Texan1211
Professor Principal
3.1.4  Texan1211  replied to  MrFrost @3.1.3    6 years ago

As much as I would like to engage you, the topic isn't tax cuts.

 
 
 
TTGA
Professor Silent
3.2  TTGA  replied to  devangelical @3    6 years ago
My tax cut is coming up way short at the gas pump and it's starting to look like it's going to get a lot worse. Fuck trump.

If we have a large oil surplus, the prices at the pump will come down significantly.  That means your tax cut will go a lot farther at the pump.  Since they have deliberately cut themselves off from a large piece of the available oil and coal supply, the Chinese are going to be paying through the nose.

 
 
 
Kavika
Professor Principal
3.2.1  seeder  Kavika   replied to  TTGA @3.2    6 years ago
Since they have deliberately cut themselves off from a large piece of the available oil and coal supply, the Chinese are going to be paying through the nose.

Actually they haven't cut themselves off from that much and it will not affect them in anyway. They will start  buying more from Iran and as stated in my comment to you above. Russian and Iran will be the beneficiaries of it. 

 
 
 
devangelical
Professor Principal
3.2.2  devangelical  replied to  Kavika @3.2.1    6 years ago

Energy just got a lot cheaper and closer to the Chinese and I'm sure that Iran and Russia could use that extra money in the middle east.

 
 
 
Kavika
Professor Principal
3.2.3  seeder  Kavika   replied to  devangelical @3.2.2    6 years ago

Russia is China's biggest supplier of oil, and with the new contracts and expansion of the pipeline between the two countries I would think that they will become an even bigger supplier to China.

 
 
 
devangelical
Professor Principal
3.2.4  devangelical  replied to  TTGA @3.2    6 years ago

No worries. After the bean counters at big oil run the numbers their bosses will make a few phone calls. trump will be strapping on the kneepads in China before the month ends. Another $0.30+ per gallon thrown onto the working class at the pump and all is right with the world, and then some.

 
 
 
Kavika
Professor Principal
4  seeder  Kavika     6 years ago

OK everyone, please address the article and the subject. If your unable to do that don't comment at all. 

Only warning.

 
 
 
bbl-1
Professor Quiet
5  bbl-1    6 years ago

Don't too excited, people.  Tariffs accomplish only three things.

1.  Some people/investors will make more.

2.  Some people/investors will barely stay in the black.

3.  Some people/investors will lose.

And there is a fourth one too.  The people that are not in the investment game will be the ones footing the bill if that need arises as deemed by the investors. 

Are tariffs good or bad?  Depends on where you stand.

 
 
 
Kavika
Professor Principal
6  seeder  Kavika     6 years ago

Now that everyone has vented their political bs, let's try to have a debate/discussion on the topic which is possible tariff on crude oil by China. 

If your capable of that please comment, if not stay the fuck off the article. I can't make it any clearer than that. 

Does everyone understand? 

 
 
 
PJ
Masters Quiet
6.1  PJ  replied to  Kavika @6    6 years ago

That kinda turned me on.   hahahaha

As the article points out, these tariffs open up the door for other countries to step up and take America's place.  I can't imagine we are going to win this game of chicken.  

 
 
 
Kavika
Professor Principal
6.1.1  seeder  Kavika   replied to  PJ @6.1    6 years ago

LOL, sometime you just have to get peoples attention. 

The US isn't that big of a supplier to China, but what we currently ship and the opportunity to expand on it (china has said that they will increase purchases of oil from us). Is a nice chunk of change. 

You can expect Russia, Iran, Nigeria, Indonesia to be getting larger orders from China. China has passed the US as the biggest user of oil in the world.  

 
 
 
PJ
Masters Quiet
6.1.2  PJ  replied to  Kavika @6.1.1    6 years ago

Yes, that's my worry.  I remember reading an article a year ago (maybe longer) about Russia trying to become a bigger player in the oil industry.  Same article mentioned Saudi Arabia having to subsidize their economy because they were trying to undercut other oil suppliers.  I see them also making a push for business because they wouldn't be able to sustain the low oil prices much longer.  

 
 
 
Kavika
Professor Principal
6.1.3  seeder  Kavika   replied to  PJ @6.1.2    6 years ago

Saudi Arabia is #2 and Russian #4 oil producers in the world. Russia is the biggest oil supplier to China and Saudi Arabia is number 2...China itself is #6 oil producer in the world. 

The pipeline between Russia and China is a real advantage for them. Not having to depend on ocean transport as their only means of transport is a good thing for them.

China has large investment in Africa a big oil producer and has been moving into South American (Brazil) with oil connections. 

 
 
 
PJ
Masters Quiet
6.1.4  PJ  replied to  Kavika @6.1.3    6 years ago

Good point.  I didn't think about the pipeline between China and Russia.   I will wait to see how this plays out and whether Russia comes out the big winner.  If that's the case, we need to consider whether this tariff war was intentional.....

 
 
 
Kavika
Professor Principal
6.1.5  seeder  Kavika   replied to  PJ @6.1.4    6 years ago

Here is a link to a good article showing the TWO pipelines between Russia and China and the volume being transported as of Jan. 2018.

 
 
 
PJ
Masters Quiet
6.1.6  PJ  replied to  Kavika @6.1.5    6 years ago

Thanks - Why do I feel absolutely frightened now?  

 
 
 
Bob Nelson
Professor Guide
6.1.7  Bob Nelson  replied to  PJ @6.1.6    6 years ago
Why do I feel absolutely frightened now?

Which is worse, Xi or Trump?

Think before answering........ one is rapidly improving the conditions of his people, the other... not so much....  

Giggle

 
 
 
PJ
Masters Quiet
6.1.8  PJ  replied to  Bob Nelson @6.1.7    6 years ago

Trump will always be worse because he's stupid and arrogant which makes him dangerous.

I wouldn't be surprised if trump concocted this whole tariff war in order to create a opportunity for Russia.  Since trump can't find a way to lift the sanctions, this tariff war gives Russia opportunities to find revenue another way.  

Russia is looking to expand its empire for a reason and it's not for humanitarian purposes.

 
 
 
Sister Mary Agnes Ample Bottom
Professor Guide
7  Sister Mary Agnes Ample Bottom    6 years ago

Exxon Mobil has billions tied up in Russia's off-shore fields near Sakhalin Island.  Trump has nearly $2 million invested, and ex-Secretary of State Rex Tillerson has $2.5 million invested.  That's why finding a loophole around the Russian sanctions was so important.  When they found that loophole (EM paid a flat penalty of $2 million for moving ahead with the Sakhalin field production, sanctions be damned), Tillerson's bromance with Trump wasn't quite as important as it had been.  That was around the same time that Tillerson resigned, which coincidentally, was shortly after the press released an alleged quote from Tillerson in which he called Trump a moron.  

 
 
 
Kavika
Professor Principal
7.1  seeder  Kavika   replied to  Sister Mary Agnes Ample Bottom @7    6 years ago

Yes, those deals and the just paying the penalty by EM sure does raise some question Sister. 

We'll see more as this plays out. The Russian, China connection and the possibility of China putting tariffs on our oil export to them will surely play havoc with the market...We'll see how much and for who shortly.

 
 
 
PJ
Masters Quiet
7.1.1  PJ  replied to  Kavika @7.1    6 years ago

Yes, but I get the feeling that Russia and China have much bigger objectives on the horizon.  

 
 
 
MrFrost
Professor Expert
7.2  MrFrost  replied to  Sister Mary Agnes Ample Bottom @7    6 years ago
Exxon Mobil has billions tied up in Russia's off-shore fields near Sakhalin Island.  Trump has nearly $2 million invested, and ex-Secretary of State Rex Tillerson has $2.5 million invested.

Exactly right. As soon as trump said he was hiring Tillerson, I did my fact checking and it was painfully obvious why he did so. You nailed it. 

And might I add, yet another connection to russia that the right insists doesn't exist. 

 
 
 
PJ
Masters Quiet
7.2.1  PJ  replied to  MrFrost @7.2    6 years ago

What is so infuriating is this information is out there for anyone who is interested in learning the truth.  I cannot understand why those who claim they want to make America great aren't jumping up and down about this and other questionable actions taken by Mr. Trump and his Administration.  How are we supposed to think anything other than they must be either stupid or corrupt themselves......

 
 
 
Bob Nelson
Professor Guide
7.3  Bob Nelson  replied to  Sister Mary Agnes Ample Bottom @7    6 years ago

We're giving Banana Republics a bad name...

 
 
 
Greg Jones
Professor Participates
8  Greg Jones    6 years ago

Meanwhile, behind the scenes, because Trump believes in free trade and doesn't like tariffs at all....negotiations are quietly going on, even as we argue and agonize here on NT. peace

 
 
 
Bob Nelson
Professor Guide
8.1  Bob Nelson  replied to  Greg Jones @8    6 years ago

Thank goodness he gives you a phone call every few hours, so you can keep us up to date...   Face Palm

 
 
 
Tessylo
Professor Principal
8.1.1  Tessylo  replied to  Bob Nelson @8.1    6 years ago

He must be on his speed dial, like Hannity.  

 
 
 
Kavika
Professor Principal
8.2  seeder  Kavika   replied to  Greg Jones @8    6 years ago

If they are in fact negotiating behind the scenes it's a failure. The first tariffs went into effect today. 

 
 
 
Kavika
Professor Principal
9  seeder  Kavika     6 years ago

The first round of new tariffs went into effect today. The first salvo has been fired by the US. China and others have responded with their tariffs. 

Will there be a round two, thee, or four....Tighten the your seat belts the ride could get really bumpy, folks.

 
 
 
PJ
Masters Quiet
9.1  PJ  replied to  Kavika @9    6 years ago

Yeah - I'm trying to see how this is going to impact my retirement fund.  Egads!

 
 

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