China isn’t intimidated by the threat of US sanctions. They haven’t been in the past. So in this diplomatic spat they might just replace US crude with Iranian oil.
China buys about $1 billion of oil a month from the United States. Chinese oil imports from the USA have been growing recently thanks to a record production surge in America.
Beijing’s retaliatory measures against US tariffs can include penalties on oil coming to China from America. A cut in Chinese purchases of US oil may benefit Iran’s sales. The Chinese may just replace some of the American oil with Iranian crude.
With Trump’s politics, we’re in a world of re-aligning alliances. China will not just swallow US tariffs. This is tit-for-tat petroleum diplomacy.
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.
China was the world’s largest net oil importer in 2014, followed by USA, Japan, India and South Korea.
RT.com / AA Flash Point Oil News 2018.
