a shot in the foot or a Chinese gambit

a shot in the foot or a Chinese gambit?

Republican Senators Marco Rubio and Rick Scott on June 15 introduced a bill to Congress “On the prohibition of oil exports to China.” If this bill receives support in both houses of Congress and is approved by the president, the supply of oil and petroleum products from the United States to China will be completely banned. Moreover, the senators’ official statement says that the purpose of the bill is to weaken China, the main enemy of the United States.

Two American lawmakers believe that their “good bill” should be supported in Congress, since the Biden administration “unacceptably and absurdly” allows the export of oil and petroleum products to China when Americans are forced to pay more than $5 per gallon of gasoline.

According to the American Automobile Association, at the end of last week, the average retail price of gasoline in the United States reached a record high, exceeding $ 5/gallon. The most expensive gasoline in California is 6.50/gallon, the cheapest in Georgia is $4.50/gallon. The rise in the price of motor fuel contributes to the unwinding of inflation in the United States and negatively affects the entire American economy.

To curb price increases, US President Joe Biden ordered 180 million barrels of oil from the country’s strategic reserves to be provided to American oil refiners. The White House hopes that this will increase the production of motor fuel and meet the demand for gasoline, which has grown significantly since the beginning of the automotive season. However, so far it has not been possible to achieve this goal. Gasoline at American gas stations has not become cheaper.

Beijing does not believe that the legislative initiative of American senators is an empty threat. The strengthening of China’s economic power worries Washington. The United States considers this country as its main opponent, with the filing of the authorities, anti-Chinese sentiments are spreading in American society. In addition, due to the situation around Taiwan, political relations between the two countries have worsened.

Over the past two decades, China’s economy has developed rapidly. Last year, the country’s GDP reached almost $18 billion, exceeding the GDP of the European Union. It is believed that in terms of economic development, China ranks second in the world after the United States. However, in terms of industrial production, China is ahead of its American competitor.

The US is increasingly dependent on imports of goods from China. In 2021, the trade turnover between the two countries reached $755.65 billion. For the US, the balance of trade with China is in deficit. Last year, the deficit reached $396.58 billion. According to the General Customs Administration of the People’s Republic of China, exports from China to the United States in 2021 amounted to $576.11 billion. The United States delivered $179.53 billion worth of goods to China.

The White House is seeking to reduce the trade deficit by increasing supplies to the Chinese energy market. According to the EIA US (US Energy Information Administration) in 2021, China became the fourth largest importer of American oil. The USA accounts for 7% of oil imports to this country – 590 thousand barrels/day.

Chinese companies are willing to buy oil and other energy resources in the United States, as this corresponds to Beijing’s policy of diversifying sources of supply of vital resources.

China is the world’s largest importer of energy resources – primarily oil. Despite government support, Chinese companies cannot meet the country’s energy needs through their own production.

Supplies from Russia can replace American oil. Transneft plans to increase the capacity of the ESPO pipeline (Eastern Siberia – Pacific Ocean) by 7 million tons/g (140 thousand barrels/day). The increase in capacity will be provided with the help of antifriction additives.

The ESPO capacity is 80 million tons/g. Deliveries to China in the amount of up to 30 million tons /g are carried out via the Skovorodino – Mohe pipeline, which is a branch of the ESPO, as well as through the Kozmino marine terminal, the final point of the ESPO, located on the coast of the Sea of Japan near Vladivostok. Last year, oil shipments from Kozmino exceeded 35 million tons.

After the imposition of sanctions against Moscow by the collective West, China began to buy all the oil in Kozmino, as a number of Asia-Pacific countries refused economic cooperation with Russia. According to Western sources, oil from Kozmino accumulates on a VLCC-type supertanker (deadweight from 200 thousand tons to 300 thousand tons). Smaller oil tankers deliver raw materials to this tanker. After loading the supertanker, the cargo is sent to one of the deep-water Chinese ports, which is capable of receiving vessels of this size.

P/S

Texas Congressman Lance Gooden said that gasoline prices in the United States will be “killer” for President Joe Biden in the period before the midterm congressional elections. He said this on the air of the Fox News channel

“I believe that in the period before the midterm elections, which will be held in just a few months, gasoline prices will be killer for him,” he said and pointed out that there are very few things that could be improved to help the president and the Democrats save Congress.

Gooden believes that the situation with high inflation and record fuel prices in the United States will not change in the near future, as the Biden administration continues to “pour expensive gasoline on the fire.”

According to him, the presidential administration refuses to admit its guilt and blames Russia, as well as oil and gas companies, for these problems.

The congressman also added that the current inflationary crisis in the United States was the result of excessive government spending and injections of money into the economy.