De-Dollarization: Chinese Refiner Replaces US Imports With Iranian Crude

Via FinancialTribune.com,

An independent Chinese refiner has suspended crude oil purchases from the United States and has now turned to Iran as one of its sources of crude, media reports cited an official from the refiner, Dongming Petrochemical Group, as saying.

The source said Beijing is planning to slap tariffs on US crude oil imports and replace them with West African and Middle Eastern crude, including crude from Iran, Oil Price reported. China has already said that it will not comply with US sanctions against Iran and it seems to be the only country for now in a position to do this.

US crude oil exports to China reached 400,000 barrels per day at the beginning of this month, but now Beijing is planning to impose a 25% tariff on these as part of its retaliation for Trump’s latest round of tariffs on $34 billion worth of Chinese goods. The retaliation began with tariffs on 545 US goods worth another $34 billion, but Reuters reports that oil tariffs will be announced at a later date.

Energy analysts seem to believe that these oil tariffs are more or less a certainty, and now expect a reshuffle of crude oil imports to Asia. With China turning to Iran for its crude, US oil could start flowing in greater amounts to another leading importer in the region, South Korea.

“If China retaliates with tariffs on US crude, that could improve South Korea’s terms of buying US crude ... because the US would need a market to sell to,” an analyst from the Korea Energy Economic Institute said.

Meanwhile, South Korea’s Embassy in Iran this weekend rejected media reports that the country had suspended oil purchases from Iran under pressure from the United States.

The US has pressed South Korea and some other nations to cut down its purchase of Iranian oil to zero or face so-called secondary sanctions. The deadline is Nov. 4 when the 180-day grace period ends.

In May, the US announced its exit from the 2015 nuclear agreement with Iran, formally dubbed the Joint Comprehensive Plan of Action, and plans to reinstate harsh sanctions on the OPEC member.

The country is the third-biggest buyer of Iranian crude in Asia, buying Iranian crude at an average daily rate of almost 300,000 barrels since March this year.

Comments

Giant Meteor Ajax-1 Sun, 07/15/2018 - 22:35 Permalink

Perhaps, but when in the last, oh I don't know, at least since the last great financial collapse has logic really prevailed .. I mean the FED lending window at zero, near zero interest for years on end, buying up all that bad paper on par from failed institutions, recapitalizing said failed institutions to inflate market and real estate asset prices, marking to fantastical unicorns, in suspension of normal accounting rules ..

The financial alchemy is going to fail eventually, and it will be some unexpected seemingly overlooked black swan that's flapped it's wings as the global dominoes begin to fall, triggering mother of all collapse, no one will be spared. Logic, The die is cast ..

In reply to by Ajax-1

MusicIsYou Sun, 07/15/2018 - 22:10 Permalink

Uh oh, gas at the pump in the U.S is about to go through the roof, because the greedy rich are not just going to lose the money from the loss of 400,000 barrels per day in sales, nope, they will charge Americans more. Because if China ends up not importing the 400,000 anymore from the U.S, then that is well over a $200 million per week loss for U.S oil.

Balance-Sheet Sun, 07/15/2018 - 22:29 Permalink

Any two countries can make a trade on any basis both parties agree to since it is an asset swap/barter. Iran ships a lot of oil to China and China sends the Persians a mountain of 'stuff' and they can denominate it any way they like. Did the Persians get a big enough pile of gadgets for a a big tank of oil? Did China get enough oil to cover the gadgets. That is it. Currency units are irrelevant really as they are tokens- and electronic tokens as well. 

MusicIsYou Sun, 07/15/2018 - 22:32 Permalink

Good, maybe $10 per gallon gas in the U.S will keep all the welfare fcks off the highway that have no reason to be driving around anyway other than getting in the fcking way.

WTFUD Sun, 07/15/2018 - 22:34 Permalink

The US doesn't sell the crude it produces abroad. The US imports crude. 

It's American companies producing in Africa & ME who sell their excess oil production to SK/Other Markets.

That heavy crude Saudi are producing and which Trump asked them to ramp up is not suitable for most refineries, although some Chinese companies have developed their refineries/tech to accommodate it.

MonsterSchmuck Sun, 07/15/2018 - 22:39 Permalink

All these sinophiles and Trump haters- 

Makes me glad they’re flummoxed by events that they think they fully understand. 

Still weird seeing Brits and US citizens cheering on these crooked commie bastards hosting our subcontracted economy.