the US President Donald trump called customs duties are an important tool in negotiations with Beijing and made their increase for Chinese goods, as one of the measures of attracting China to the liability for failure to inform the global community about the appearance of coronavirus.
Demand for oil in China in February fell by more than 20% of the roughly 3 million barrels a day, and then gradually began to recover in March-April. But now, after the statements of Donald trump, there are serious concerns that the recovery in the Chinese economy could severely slow down or even roll back a little. If the President of the United States move from words to action, on the quotes of the barrel this may have the effect of a cold shower, dropping them to new record lows.
However, oil prices are only the tip of the iceberg. If the OPEC countries and their new allies will be able to balance supply and demand in the market, the price will return to valid for the normal development of the industry values, even maintenance will require regular additional action by the parties to the transaction. The new round of trade conflict between the United States and China may lead to some redistribution of flows of oil export and the struggle for markets.
China is the largest importer of oil in the world and its main suppliers of “black gold” in Saudi Arabia, and Russia. Together, these two countries accounted for more than half of the total oil imports of China, and their exports in this direction, most likely, threatens nothing. Both countries have established long-standing, close and good relations with China. In addition, Russia has a logistical advantage – the ability to deliver oil by pipeline and only the geographical proximity to this market.
In the first place, affected by the introduction of new customs duties can the United States itself, finally deprived of the opportunity to export to China their energy. This means that history will repeat in 2019, when the background of a trade war with China, the United States tried to fill the surplus of its oil to Europe. Even with the falling shale production and rising imports in the U.S. sour crude oil to export its oil States will not cease. It is simply not needed for internal use in such quantity.
the Main markets, in the absence of China, the United States will become Europe, and other Asia-Pacific countries. Apparently, it is for them to unfold the main battle between the three main players – Russia, USA and Saudi Arabia. For our country, a definite plus in this story will open the Chinese market and, paradoxically, the need for Russian sour crude oil within the United States, which is necessary for us refineries. But in Europe the activity of American traders cant increase that can create problems for Russian exports. And given the frequent use of the political tools of pressure to achieve economic results, they can be quite serious.
