Via Oilprice.com

Trade War

Oil prices this week are being dictated by yet another highly emotional trade war round that seemed to come out of nowhere. If Beijing really wants to dig in against Trump now, it will target US crude oil and LNG, and that’s where the backlash will really bite. Trump may well have overplayed his hand this time around.

Right before Trump announced his latest tariff threat (which has now gone beyond threat), Chinese oil refiners were picking up momentum with their US crude oil purchases. They were also preparing to jump in on some US LNG supply deals. Right about now, the US LNG industry is probably experiencing a bit of uncertainty because China is one of its top market destinations. Beijing already has a 10% tariff on US LNG imports, and we might see a 25% retaliatory tariff now. Can China replace US LNG imports? Yes, alternatives come from Qatar, Russia and Australia (the key beneficiaries here). The tariff war, then, means a leg up for the LNG competition and it won’t win Trump any supporters in the oil and gas industry.

The Biggest Story in the Oil Patch …

Libya’s internationally recognized Government of National Accord (GNA) is getting desperate now and they’re explicitly targeting oil but also throwing in, for good measure, dozens of other companies connected to countries that are on this wrong side of the conflict. Specifically, they’re targeting French oil giant Total SA, and while they won’t say this is politically…

READ ALSO  Oil Prices Slip Again As COVID Cases Surge