China To Impose 5% Tariff On U.S. Crude From Sept. 1: State Council

As you can see South Korea is the largest importer of US crude oil. Then Canada. China just started importing US crude again… And even with the 5% duty US oil is still the cheapest they can import!

Singapore — China’s plans to levy 5% tariff on U.S. crude imports from September 1 caused a drop in benchmark crude prices Friday, jeopardized seaborne U.S. crude shipments heading to China and limiting buying interest in U.S. crude from Chinese refiners. BULLSHIT!

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Here is where they make an asshole out of you. Before the announcement, Crude NY was trading at $55.50 a barrel. It fell to a low of $53.25 a barrel on Friday after the announcement. A drop of $2.25 (we issued a buy on the low in Brent) closing at 53.97 down $1.42 for the day. So if we take U.S. crude at $53.97 NY closing price and add the 5% tariff, you get $56.66 a barrel duty paid. Well within the range oil has been trading at lately. Now let’s suppose the Chinese buy Saudi oil to replace U.S. crude. So let’s say you’re sucked in by the bullshit because they made you stupid and you believe, OH my GOD the US oil market is doomed. Well the fucked up logic goes like this. The Chinese, the largest importers of oil in the world won’t buy U.S. oil because of the $2.69 cent duty. The only supplier in volume is the Saudis. And Saudi oil is trading at $60.13 a barrel. So that means U.S. crude is still cheaper duty paid by… $3.69 barrel. WTF, don’t let them make a fool out of you. Oh, another thing they forgot to tell you. U.S. oil exports are minuscule and the Chinese at best bought only 10% of their oil from U.S. suppliers… DAH!!!!!