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How could US-China trade war affect oil market?

Oil&Gas Materials 10 July 2018 16:47 (UTC +04:00)

Baku, Azerbaijan, July 10

By Leman Zeynalova – Trend:

A “trade war” of any type is likely to raise prices, Spencer Welch, director of the oil markets and downstream team in the London-based IHS Markit told Trend.

He was commenting on the possible consequences of the US-China trade war on the oil market.

“Although at this stage we do not anticipate a major impact, a “trade war” of any type is likely to raise prices, reduce spending and therefore directionally slightly slow down economic growth,” said the expert.

Welch said he does not expect this trade war to significantly affect the oil market as a whole.

“Potentially a very minor impact unless there was a large escalation,” he said.

“Fundamentally the world’s demand for oil is growing strongly (at more than 1 million barrels per day of growth each year) and we expect this to continue,” noted Welch.

US President Donald Trump has said the United States may ultimately impose tariffs on more than a half-trillion dollars’ worth of Chinese goods.

Trump confirmed that the United States would begin collecting tariffs on $34 billion in Chinese goods and warned that subsequent rounds could see tariffs on more than $500 billion of goods, or roughly the total amount that the United States imported from China last year.

China immediately accused the US of starting “the largest trade war in economic history to date” and responded by imposing 25 percent tariffs on $34 billion worth of US goods, including soybeans, automobiles, and lobsters.

This marks the start of the trade war between the two countries.

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Follow the author on Twitter: @Lyaman_Zeyn

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