• Rajasthan

    Cong 98
    BJP 74
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 111
    BJP 110
    BSP 2
    OTH 7
  • Chhattisgarh

    Cong 67
    BJP 17
    JCC 6
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

US-China trade war shocker: Escalating tensions may jolt world demand for crude oil; BP predicts slowdown

By: | Published: September 25, 2018 11:14 AM

US sanctions on Iran will tighten global oil supplies sharply until the end of the year, but a threat to world demand looms in 2019 from the U.S.-China trade war, the head of BP's oil trading in Asia said.

India to pay in rupees for Iranian oilThe world’s two largest economies, China and the United States, have imposed tariffs on each other’s imports in an escalating trade war. (Reuters)

US sanctions on Iran will tighten global oil supplies sharply until the end of the year, but a threat to world demand looms in 2019 from the U.S.-China trade war, the head of BP’s oil trading in Asia said. “We’re moving into the tightest part of 2018 … the re-imposition of Iran sanctions is the main factor as the market will tighten substantially from now to year-end,” Janet Kong, chief executive of Integrated Supply and Trading Eastern Hemisphere at BP told Reuters. Saudi Arabia and Russia won’t add significantly more oil to the market because of a lack of capacity, a top Iranian official said on Monday, predicting prices will probably rise further.

Sanctions on Venezuela are also exacerbating a production decline there, while outages in Nigeria and Libya have further crimped supplies, Kong said, with Brent supported at above $80 a barrel.

“The market fundamentals in the short term look very bullish and positive due to supply shocks, but over time, when supply catches up and the shock to demand becomes more evident, the market will go through another round of re-balancing next year,” she said.

The world’s two largest economies, China and the United States, have imposed tariffs on each other’s imports in an escalating trade war that has rattled global markets and raised concerns of a slowdown in world economies and commodities demand next year.

“Going into 2019, I worry about the impact of the U.S.-China trade war, manifesting itself slowly,” Kong said.
“The trade war impact has not really shown up in the data anywhere, but it will show up gradually over time. So the supply shock is very sharp and prompt, while the impact from trade war is boiling over slowly.”

Analysts and the International Monetary Fund have forecast a 0.5 percent to 1 percent drop in world gross domestic product growth next year, she said. The International Energy Agency said in its monthly oil report that global oil demand is set to to top 100 million bpd next year, although emerging market crises and trade disputes could dent this figure.

“The Trump administration wants intellectual property protection … reducing subsidies to Chinese SOEs (state-owned enterprises) and open market access by all businesses which are difficult, in my view, for the Chinese government to agree to,” Kong said. “So it’s very likely this war will drag on for a long time.”

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition