Published: Mon, July 09, 2018
Economy | By

Iran's oil minister has hit back at Trump over production demands

Iran's oil minister has hit back at Trump over production demands

US crude CLc1 slipped 2 cents to $72.92.

More importantly, some respected observers refuse to join the popular chorus of Trump bashing and suggest the brash billionaire may be picking a fight with China at just the right time: Stephen Guilfoyle, a Wall Street trader and president of Sarge986, said the president's trade policies have China "by the short hairs".

United States crude futures added 8 cents, or 0.1 per cent, to.88 after trading slightly lower earlier in the morning. In response to this, members of OPEC reportedly agreed to produce an additional one million barrels of crude oil on a daily basis to keep the prices stable on the market.

And amid an escalating tit-for-tat war between Trump and Xi in which neither leader is even remotely close to crying uncle, industry participants expect the tariff to be levied, a move which would make future purchases of U.S. oil uneconomical for Chinese importers.

"If China imposes tariffs, their refineries won't buy USA crude since it would cost more", Reuters quoted Sandy Fielden, director of research for commodities and energy at Morningstar Inc, as saying over telephone.

Although the current list of products caught in the tariff war does not include energy-related products, oil traders continue to monitor the events because Beijing has threatened a 25-per cent tariff on United States crude imports. "U.S. sellers would have to find alternative buyers".

He added his refinery had cancelled USA crude orders and would switch to Middle East or West African supplies instead.

USA energy companies last week increased the number of rigs drilling for oil by five to 863, up 100 year-on-year, General Electric Co's (GE.N) Baker Hughes energy services firm said in a report on Friday.

India imported 4.7 million barrels oil from the USA, which is about nine times more than it imported from U.S. in April and the most of any month based on United States government data going back to 2015.

Cutting Iran out from oil trading comes amid other disruptions.

Driscoll said China may even replace American oil with crude from Iran.

"Iran's exports are some 2.7 million bpd, including condensate", it noted.

An additional fact to consider: Tariffs would make US oil uncompetitive in China.

China responded promptly and slapped duties on the same amount of value unto USA products.

Oil prices surged to their highest level in more than three years this week, sending the price of a barrel of oil up to $74.15, the highest price since November 26th of 2014. However, if the ongoing pipeline bottleneck in the Permian is not resolved soon, said solace will prove to be short-lived.

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