Oil prices climb on global demand and U.S. sanctions on Iran

That double whammy is prompting Asian refiners to move swiftly, with South Korea leading the way.

"If the Saudis and others replace the losses from Iran, there will be basically no spare capacity left", Societe Generale analyst Michael Wittner said. -China tit-for-tat on trade.

"Things will get worse before they get better on trade... between the US and China", said Greg McKenna, chief market strategist at futures brokerage AxiTrader. Although there is some general nervousness over the U.S.

Early Friday, WTI Crude was down 0.78% at $72.37, and Brent Crude traded down 1.23% at $76.44.

According to the latest estimates, American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

China has said it would immediately retaliate with its own tariffs, and U.S. President Trump said on Thursday the United States may ultimately impose tariffs on more than a half-trillion dollars worth of Chinese goods, in what may become a fully blown trade war.

It is now trying to negotiate a waiver from the USA sanctions, but judging by the State Department's stated goal to reduce Iran's crude oil exports to zero, success is uncertain.

While no date has been set, industry participants expect the tariff to be levied.

Although the current list of products caught in the tariff war does not include energy-related products, oil traders continue to monitor the events because Beijing has threatened a 25-per cent tariff on USA crude imports.

An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on USA oil imports.

"We expect the Chinese government to impose tariffs on (U.S.) crude", the executive said, declining to be named as he was not authorised to speak to media.

The cancellations mean South Korea will import no Iranian oil in August, the first month of zero imports since August 2012 when South Korean buyers put Iranian oil purchases on hold before getting a waiver to import limited amounts of Iran crude, Reuters added. The report said Hojjat al-Islam Mojtaba Zolnour, a hardline member of Iran's parliament, had made the allegation in an interview with a local newspaper.

In Japan, Asia's third-biggest importer of crude, the oil industry has yet to react publicly to Friday's news.

An oil pump jack is seen at sunset near Midland, Texas, U.S., May 3, 2017.

Amid the turmoil, some in the region spot opportunity.

Dr. Len-Yu Liu, Chairman of TAIFEX said, "We are extremely pleased to work with ICE Futures Europe for launching Brent Crude Oil Futures in Taiwan".

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