How US-China trade war may bring cheaper oil to Indian shores
-China’s biggest trading house has already stopped buying US crude and Beijing looks set to slap retaliatory tariffs on US crude and LNG
-Meanwhile, in August, India has booked a total of 9.94 million barrels of crude from US, which is almost triple the amount in July
-Industry players say India may enjoy a better bargaining power to argue for a US waiver
The trade war between China and the US + has shown enough signs of escalation, with the two economic powerhouses employing tit-for-tat tactics for imposing tariffs in the last few months. China is the largest buyer of US crude and gas in Asia.
But its biggest trading house has already stopped buying US crude and Beijing looks set to slap retaliatory tariffs on US crude and LNG. A boycott of US oil indicates Beijing’s continued purchase of Iranian oil, keeping Tehran in play in the global oil market.
The tension between US and China + however, may partially blunt the effect of Iran sanctions on India’s oil sourcing. India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.
This would be almost triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November last year, the previous record for a month.
The August total is also likely to be just above the 9.65 million barrels imported over the first seven months, showing the scale of acceleration in India’s imports of US crude.
Industry players say India may enjoy a better bargaining power to argue for a US waiver as it will be the only big buyer of US crude in Asia after South Korea. This will also help moderate the impact on crude prices, something that has been worrying policymakers.
The expected paring of India’s imports from Iran after this month and the increase in purchases from the United States also raise questions about the politics of oil.
India is the world’s third-largest crude importer, and if it cuts its purchases from Iran, another likely major beneficiary besides the United States is Tehran’s regional rival and Trump ally Saudi Arabia.
Source: Times Of India