June 22, 2018
President Trump announced his intent to level hefty tariffs on $50 billion of Chinese imports, beginning July 6, 2018. China noted it would retaliate by slapping its own duties on American commodities – including oil. If both countries follow through on their threats, the results could disrupt the U.S. oil industry, which is valued at almost $1 billion per month.
The potential drop-off in oil exports from the United states to China could benefit other producers, especially from OPEC and Russia. It could also benefit Iranian sales, which Washington is attempting to curb with recently-announced sanctions.
“China isn’t intimidated by the threat of U.S. sanctions,” JTD Energy Services’ John Driscoll told Reuters. “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.”
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