The US-China trade war may escalate to energy
A trade reconciliation between Washington and Beijing may come too late for the US oil and gas industry
If China's leadership can draw one lesson from 2019, it is that there are risks to relying on other nations. US export bans on technological components to ZTE and Huawei raised questions about the wisdom of relying on the US for critical inputs to the economy. While the focus has so far been on technology it is certainly possible that the US could extend this to energy, which is similarly vital to the functioning of the Chinese economy. While China has little or no direct exposure to US energy exports, it does not mean that China is immune to US policy. The recent US blacklisting of dozens of tankers operated by Cosco has resulted not only in a spike in very large crude carrier (VLCC) rates
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The continent’s inventories were already depleted before conflict erupted in the Middle East, causing prices to spike ahead of the crucial summer refilling season
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The US president has repeatedly promised to lower gasoline prices, but this ambition conflicts with his parallel aim to increase drilling and could be upended by his war against Iran
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With the Strait of Hormuz effectively closed following US-Israel strikes and Iran’s retaliatory escalation, Fujairah has become the region’s critical pressure release valve—and is now under serious threat
