Earlier this month, Beijing proposed a 25 percent retaliatory tariff on imports of US petroleum. Still, oil prices today surged by more than 3 percent, after the US State Department said it will require companies to cut oil imports from Iran to zero in the upcoming months, which is expected to increase demand for US oil.
It’s still too soon to know whether Trump’s decision to withdraw from the Iran nuclear deal will offset forecast challenges relating to oil exports, but heads of the world’s two largest energy companies are still expressing concern that trade tensions may destabilize the global economy and have a negative impact on energy demands. For now, the US OCTG market is watching and waiting.
“There’s still a lot of concern about year-end shortages, and traders are scrambling to find sources to fill the gap,” a source said. “The quota against Korean imports is going to hurt a lot of us. I don’t even know what pricing is going to look like during Q4.”
US domestic pricing, meanwhile, has remained stable. US domestic J55 ERW OCTG casing is still trending between $60-$70 cwt. ($1323-$1543/mt or $1200-$1400/nt) ex-mill, although a growing number of transactions are taking place toward the top end of that range.
Demand, sources say, has remained robust due to the strength in global oil prices.