Mideast emerges as ‘energy winner’ in US-China spat

Bloomberg

The Middle East is emerging as a potential beneficiary of the brewing trade war between the US and China as the Asian nation strikes back with retaliatory tariffs on American petrochemical products.
If China goes ahead with its proposal to slap a 25 percent tariff on polyethylene and liquid propane, which were among 106 American goods targeted, buyers in the Asian nation may look elsewhere for alternatives to pricier US supplies. And the energy-rich Middle East with plenty of petrochemical supplies looks well-suited to meet the substitution requirements. China imports 12.7 million tons of the product a year, of which the US currently accounts for only 600,000 tons, Goldman estimates.
But purchases from the US have the potential to grow more than threefold over the next two years if the tariffs aren’t implemented, it said. As for propane, China is the third-biggest export market for the US and has boosted purchases from there in recent years. Although the tariffs won’t hurt America as much as intended, the most likely alternative option is the Middle East as more supplies come on stream there, according to industry consultant Energy Aspects Ltd.