In early August, the Office of the United States Trade Representative issued a list of approximately $16 billion worth of Chinese goods to be subject to an additional 25 percent tariff in response to what Washington described as Beijing’s unfair trade practices related to the forced transfer of US technology and intellectual property.
Starting from 04:01 GMT on Thursday, US Customs and Border Protection started collecting the extra duties on the Chinese imports. China responded to the US actions with its own list of tariffs covering $16 billion of US imports.
The list of Chinese goods contains 279 commodities, ranging from lubricating oils to railway cars and steam turbines.
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China’s levies target the same value of US goods, including propane, butane, naphtha, jet fuel and coal.
New Prospects For Russia
"China can replace the missing volume through an increase in imports from Russia, as well as the rise in the purchase of ‘sanctioned’ Iranian oil, which probably could be bought at a discount," Marinchenko said.
Deputy Director of the corporate ratings group at the Analytical Credit Rating Agency (ACRA) Vasily Tanurkov noted that China had always tried to diversify suppliers of oil and petroleum products.
"Although Russia ranks first among exporters of oil to China, its share in the Chinese market is only about 11 percent. Approximately the same volume is delivered by Saudi Arabia, Iraq, Angola and Iran. The US share in China’s imports of oil and materials derived from crude oil in 2017 stood just at some 3 percent (about $7.3 billion)," the expert said.
READ MORE: US-China Trade War Opens Export Opportunities for Russian Manufacturers — AmCham
The market of China and the Asia-Pacific Region was a premium one for Russian companies, head of Crude Oil Upstream & Technologies Division at VYGON Consulting firm Daria Kozlova told Sputnik.
"For example, in July 2018, netback [measurement of oil and gas sales revenue net of royalties, production and transportation expenses] in Western Siberia was 2,000 rubles (about $30) per tonne more here than for delivery to Europe," Kozlova said.
Alexander Bakhtin, investment strategist at the BCS Premier, noted that it was still difficult to predict the impact of the trade war between the United States and China on the global economy.
READ MORE: China Vows to Challenge US Import Tariffs at WTO
"But specifically, sanctions on oil products will not affect the price of oil, but will change the structure of supplies of these products to China. Russia can just become one of the beneficiaries of these measures by increasing supplies in a number of dimensions," Bakhtin told Sputnik.
Impact On Global Market
The Fitch Ratings’ analyst believed that the introduction of duties on commodities could theoretically lead to an imbalance in the global energy market.
"Spreads (differentials) between different grades of commodities will increase and the average price level may grow a little bit. This is due to the fact that overall demand and supply remain unchanged, but the ‘transport leg’ increases, and the flow of goods becomes less optimal. In particular, the discount with which the US’ West Texas Intermediate (WTI) is traded against the Brent crude may show a slight growth," the expert said.
"China today imports about 600,000 barrels of oil and oil products per day. This is less than 4 percent of oil and condensate extracted in the United States and about 0.6 percent of the global production. In addition, restrictions may be in some ways circumvented by swap transactions," Marinchenko added.
READ MORE: Unilateral US Tariffs Will Be Felt by All Countries — Russian Economy Ministry
Marinchenko, nonetheless, noted that the impact on the gas market might be more significant.
"China, as the largest consumer of gas, is likely to support Russian gas projects, such as the Arctic LNG 2 and the Power of Siberia gas pipeline extension. For China, where gas consumption is rapidly growing, ensuring the security of supply is a matter of national importance," he explained.
"For the global market, Chinese imports of oil and petroleum products from the United States are vanishingly small, so we should not expect any notable consequences on the world oil market," he said.
The US-China trade dispute started several months ago after US President Donald Trump announced tariffs on imported steel and aluminum in order to fix the US trade deficit with China, caused by the fact that import from China largely exceeded US export.
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The Chinese authorities have stated on numerous occasions that the trade dispute should be resolved through negotiations, stressing that the tensions between the two countries were fueled by Washington.
The views and opinions expressed by the speakers do not necessarily reflect those of Sputnik.
