China threatens to cut US oil purchases

Reuters:
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

About 14 million barrels of U.S. crude are set to arrive in China in July, which would be the highest monthly figure on record, according to Thomson Reuters flows data.
...
They are buying the US oil at a discount to the market so buying other oil at the market would be a costly move for China.  I think they are smarter than that, but irrational moves are not out of the question when it comes to defending theor unfair trade practices with the US.

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