Part of the tariffs imposed by China on U.S. goods from the United States included crude oil when first announced in June. The Chinese have since reconsidered the tariff and have left it off the initial list of $16 billion worth of U.S. imports.
As reliance on imported oil has dramatically fallen for the United States, the reliance has increased for China. The International Energy Agency (IEA) estimates that China will rely on energy imports for 80% of the country’s energy needs by 2040, up from 70% currently.
Refineries in China have become accustomed to the higher quality of light sweet crude oil imported from the U.S., among the easiest and least expensive to refine in the world. China’s largest suppliers of oil are currently Russia and Saudi Arabia, supplying a heavier and more costly crude to refine than U.S. crude oil.
Many analysts believe that even if China does eventually place tariffs on American oil imports, other buyers in Asia will step in and buy the supply due to the favorable characteristics.
Sources: U.S. Dept. of Energy, IEA, Commerce Dept.
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