Energy Sector

[fareastwarriors]

 

 

 

Why Europe will struggle to buy more US gas

 

[yesman182]

On 1/15/2025 at 9:05 AM, SharperDingaan said:

Just to throw out some numbers ..... for simplicity assume just one seller, and one US buyer refining Alberta crude.

 

No tariffs. 100 bbl sold @ USD 60 world price; seller gets USD 6,000, refiner pays USD 6,000. 

> US 25% tariff. 100 bbl sold @ USD 60; seller gets USD 6,000, tariff collector gets USD 1,500 (25%), refiner pays USD 7,500. US consumer pays more.

 

But the refiner can only pay USD 6,000 ......

> US 25% tariff. 100 bbl sold @ USD 60; seller gets USD 4,800, tariff collector gets USD 1,200 (25%), refiner pays USD 6,000. Producer gets 12% less revenue on the same 100 bbl sold. Need a solution ....

 

Cut US bound production to 80 bbls, sold at a higher price. Sell the remaining 20 bbls to Asia from BC tidewater. 

> US 25% tariff. 80 bbl sold @ USD 60; seller gets USD 4,800, tariff collector gets USD 1,200 (25%), refiner pays USD 6,000. US consumer pays more as the refiners cost is now USD 75/bbl, and in the short-term the refiner can't refine crude from anywhere else.

> No US 25% tariff. 20 bbl sold to Asia @ USD 60; seller gets USD 1,200. Producer gets a total of USD 6.000 (4,800 + 1,200) on the 100 bbl sold.

 

As long as the new west coast pipe and rail  has the capacity; the only folks getting hurt here are the US consumer, and it is the US tariff collector that has their money. And if that BC tidewater buyer is US tariff exempt ..... they merely sail a tanker down the west coast, and sell the crude to the refiner at a very profitable USD 75/bbl less costs. 

 

The way out is new and big pipe going south. Drop the tariffs, double production, spread the costs over a bigger base, and everybody wins.

 

SD

 

 

 

 

I was under the impression that the importer paid the tariff. So in the case of Canadian oil, it would be the US refiner. But Trump talked about setting up a ERS (external revenue service) to manage the tariffs paid by foreign nations.  If these tariffs are put in place on Canadian crude headed to the US, who will send the check to the US government? 

[Spekulatius]

21 minutes ago, yesman182 said:

I was under the impression that the importer paid the tariff. So in the case of Canadian oil, it would be the US refiner. But Trump talked about setting up a ERS (external revenue service) to manage the tariffs paid by foreign nations.  If these tariffs are put in place on Canadian crude headed to the US, who will send the check to the US government? 

Tariffs are just consumption taxes on foreign goods . This is not that complicated.

There will be no checks from other governments. He might as well have the IRS manage the tariffs.