The US Wall Street Journal website published an article on July 24th entitled “Treaty of Tariffs Threats China’s Aspirations for American Oil,” saying that for the US oil industry, the escalating Sino-US trade war may mean that US oil will lose. The opportunity to break into a strategic market.
The article said that China has been the largest new buyer of shale oil in the United States. Today, China is the second largest consumer of US oil exports after Canada. China’s oil demand has soared in the past two years, and the country bought one-fifth of the US’s crude oil exports last year. This rapidly growing demand has made US oil exporters vulnerable to trade wars between the world’s two largest economies.
The article quoted Soresh Sivanandan of Wood Mackenzie Consulting in the United Kingdom as saying: “From the perspective of the United States, China is an important market, but (US oil shipments to China) only account for China’s oil imports. About 3%. So at this point, the US will lose more than China.”
The article said that two years ago, China’s economic slowdown and its pursuit of renewable energy made people further worried that China’s oil demand is reaching its peak. But the growing popularity of sport utility vehicles and air travel shows that China’s oil demand is still large. In recent years, China’s crude oil imports have not only declined, but have grown substantially, reaching a record 298 million barrels in January. At the beginning of last year, China overtook the United States to become the world’s largest oil importer. Today, 70% of China’s oil demand is imported, and according to the International Energy Agency, this number will climb to 80% by 2040.
The article believes that if China imposes tariffs on US oil, then US oil exporters may lose their long-term big buyers in China and turn to other countries to find smaller, more dispersed buyers.
According to the article, analysts believe that China’s oil demand (currently) is unlikely to peak, and it may continue to grow for at least several decades. Most importantly, this trade war is bound to highlight another reality: traditional energy once again dominates, but its center is turning to the East.
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