Six ships of US crude headed to China despite tariffs
Six ships carrying about 12 million barrels of U.S. crude are headed to China just as Beijing prepares to impose its first ever levy on American oil next month.This points out how China is mainly hurting itself by its refusal to agree to a fair trade agreement with the US. The Chinese tariff on US agricultural products may be hurting farmers in China as much or more than in the US. I have seen stories of a massive pig slaughter in parts of China because of a lack of food for feeding them
While the cargoes could be diverted, the shipments highlight the growing demand for U.S. crude in Asia even as tensions escalate between the world’s two biggest economies. China, briefly a top buyer of American oil, has scaled back shipments since the trade war began.
Now, in a counter move to the Trump Administration’s latest round of tariffs, Beijing plans to tax a host of American goods including crude oil starting September 1. That would make crude from the Permian Basin about $3 a barrel more expensive to Chinese buyers, rendering it less attractive.
The six ships, scheduled to dock in China through October, could be rerouted and the cargoes resold for better value. U.S. oil that is sometimes shipped to the Chinese market from transshipment zones in Malaysia and Singapore or the Caribbean also could get directed elsewhere.