The restriction on US crude exports was lifted in December of 2015, removing a market distortion that reduced the value of US crude oil relative to other freely traded seaborne barrels. Since that time China has emerged as a major importer of US sourced crude oil as it sought to improve its strategic diversity of oil sources.
Most of the exports to China have been on VLCCs, which add substantially to ton mile demand given the length of the voyages. With China dialing back purchases, we expect to see the discount for US oil to widen, penalizing US producers and sending more exports to European and other Atlantic Basin refiners, which will be good for Aframaxes, and bad for VLCCs.
Trade restrictions destroy economic value over the long run, but in shipping their effects are felt almost immediately. The imposition of tariffs by the US and China, and the reciprocal action by China will reduce demand for oil, agricultural products, recycling materials, and other dry bulk products. This trade distortion will create some positional advantages and disadvantages, but the net effect will eventually be fewer goods shipped, and higher prices for end users of commodities.
Prices for US raw materials will be discounted to encourage consumption in other markets. The impact to shipping remains muted due to the seasonality of the shipments in the dry bulk markets.