China's proposed tariffs on US petroleum imports, part of a mounting trade war between the two countries, would crimp sales to the shale industry's largest customer, adding new pressure on US crude prices, energy executives and analysts said in interviews this week.
China has said it would slap a 25 per cent tariff on imports of US crude, natural gas and coal on July 6 if Washington went ahead, as planned, with its own tariffs on Chinese goods that day.
Energy would be added for the first time to a burgeoning trade dispute that has hit imports of Chinese metals and solar panels, and exports of US medical equipment and soybeans.
Targeting petroleum puts the Trump administration's "energy dominance" agenda in Beijing's crosshairs. US shale has grabbed share from Middle East suppliers in Asia.
China is the largest customer for US crude, importing about 363,000 barrels per day in the six months ended in March. Thomson Reuters shipping data shows those exports have increased since, rising to an expected 450,000bpd in July.
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"It is going to hurt everyone for the short term," said Ron Gasser, vice president at Mammoth Exploration, a west Texas shale producer. While US crude will continue flowing to market even with tariffs, "it'll force you to put your oil somewhere else, and it'll cost you more" to line up other buyers.
US oil exports have steadily grown since the four-decade ban on crude exports was lifted at the end of 2015.
China's tariff threat caught US producers off guard because it had been discussing buying more US energy and agricultural products to reduce its US$375 billion (Dh1.38 trillion) trade surplus with the United States. The levies could boost suppliers of West African crude at the expense of US exports.
The tariffs are "creating a whole new set of uncertainties on top of what's already there", Daniel Yergin, vice chairman of consultancy at IHS Markit, said on Tuesday as he arrived in Vienna to attend this week's Opec International Seminar.
On Friday, Opec oil ministers will gather to consider sharply increasing the group's production this year, a move advanced by Saudi Arabia and Russia. The change is opposed by members Algeria, Iran, Iraq and Venezuela. The United States also recently set new sanctions on Iran's petroleum industry, which is expected to disrupt oil flows.
"The global oil industry didn't really worry or think about trade issues. Now, trade issues are moving really pretty fast up the agenda," Mr Yergin said.
The impact likely would be temporary as US oil becomes less attractive to Chinese buyers. But the tit-for-tat expansion of tariffs has US oil industry officials and politicians calling on the Trump administration to move cautiously.
The American Fuel and Petrochemical Manufacturers Association on Tuesday called on the president "to work with China – and all nations – to reduce barriers to competition rather than promote them."
US Senator Michael Enzi, Republican of Wyoming, a coal- and oil-producing state, wants the administration to be "wary of how these retaliatory measures from China could seriously impact the industry", spokesman Max D'Onofrio said on Monday.
In coal country, there are worries the trade war could harm exports, said Steve Roberts, president of the West Virginia Chamber of Commerce. "China is an enormously important trading partner," he said.
Some US producers said growing demand for US energy would overcome the impact of China's tariffs, just as higher oil prices this year have not slowed the global thirst for oil and natural gas.
Gary C Evans, chief executive of shale producer Energy Hunter Resources, called the tariffs "a lot of sabre rattling" that will not hurt exports of US crude oil or liquefied natural gas, the latter a fuel that China has not included on its list of products facing a tariff.
"Crude oil is a fungible global commodity," Mr Evans said. "Without growing US crude supply and exports, global prices could today be multiples higher than they currently are."