How exactly is the trade war between the United States and China affecting the global oil industry?

The greatest impact of the United States-China trade war on the global oil industry is its effect on oil prices, explains Steve Wood, a managing director at financial services company Moody’s.

“The market is concerned that a prolonged dispute will result in slower global economic growth leading to lower demand for oil,” Wood told Rigzone.

“This, in turn, has caused oil prices to weaken, which reduces cash flow and earnings for oil producers,” he added.

Given the current considerations on the supply side, the oil market should have seen risk premium pushing up oil prices, according to Rystad Energy Senior Analyst Artyom Tchen.

“Instead we haven’t seen that over the last month,” Tchen said.

“We believe that [the] United States-China trade war and resulting weak economic growth sentiment is among those factors that balance supply risks and cap oil prices,” the Rystad Energy representative added.

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