U.S. Oil's Pricing Allure Risks Being Dulled by China Tariff
- Potential levies seen hurting arbitrage trade flows from U.S.
- China may boost oil imports from OPEC members, including Iran
This article is for subscribers only.
China’s planned levies on U.S. crude as part of an escalating trade dispute threatens to dim the attractiveness of American supplies in the world’s biggest oil-importing nation.
Crude pumped from the shale fields of Texas and wells in the Gulf of Mexico have been increasingly finding their way to Asia as American oil turned relatively cheaper versus supplies from other parts of the globe. While China has been the top importer of cargoes in the region, its proposed tariffs risk eroding the benefit from U.S. crude’s discount over other benchmarks that had opened the door for arbitrage shipments to flow east.