So far, WTI's relative resiliency is not something that would please USA president Donald Trump, who in tearing up the nuclear deal with Iran and reimposing sanctions against the Islamic republic, is betting that Saudi Arabia and other countries will not only make up for the shortfall in Iranian crude exports but also flood the market with enough product to reduce gas prices at the American pump.
But the US oil market is still tightening. " Standing in the line of fire are US crude supplies to China, which have surged from virtually zero before 2017 to 400,000 barrels per day (bpd) in July". China's Ministry of Commerce stated that it had no choice but to respond to the United States, which they claim had "launched the largest war in economic history".
Although just 5 percent of China's overall crude imports, these supplies are worth $1-billion a month at current prices - a figure that seems certain to fall.
On Friday, the USA tariffs on $34 billion worth of Chinese goods were implemented. On Thursday, an executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on US oil imports.
He said his refinery had cancelled U.S. crude orders and would switch to Middle East or West African supplies instead.
In an early sign of future times, an executive from China's Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled U.S. crude orders.
India imported 4.7 million barrels oil from the USA, which is about nine times more than it imported from U.S. in April and the most of any month based on United States government data going back to 2015.
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"Shale crude is not an alternative to Iranian crude", Fielden said.
Iranian OPEC Governor Hossein Kazempour Ardebili told Reuters that Trump "should have expected" when blocking Iran's access to the global markets that it would end up as "hostage (to) Saudi Arabia and Russia", who he said had little vested interest in bringing down prices.
South Korea is the world's fifth-largest crude oil importer, and diversity of supplies is vital.
"Iran's exports are some 2.7-million barrels a day, including condensate", it noted.
Indications are growing that show the U.S. can not rely on Saudi Arabia for too long to make up for the missing Iranian oil supplies once American sanctions are re-imposed against the country.
While next steps remain unclear, the potential outcome for the U.S. isn't: should China fully pivot away from United States exports and replace them with Iranian product, the USA trade deficit will resume rising, further adding to the pressure of what is Trump's biggest economic hurdle: the double USA deficits.
The U.S. rig count, an early indicator of future output, is much higher than a year ago as energy companies have ramped up production in response to higher prices. However, if the ongoing pipeline bottleneck in the Permian is not resolved soon, said solace will prove to be short-lived.