* U.S. plans tariffs on additonal $200 billion of Chinese goods
* WTI crude falls 70 cents to $73.41 a barrel in New York

By Grant Smith and Tsuyoshi Inajima

(Bloomberg) —

Oil fell below $74 a barrel after U.S. President Donald Trumpescalated a trade war with China, heightening fears that global economic growth could be caught in the cross-fire.

Futures in New York fell 0.9 percent, slipping in tandem with equities and metals, after the Trump administration unveiled a list of $200 billion in Chinese goods that could face 10 percent tariffs once public consultations end in August. Losses were deeper for Brent crude, the European benchmark, as Libya’s national oil company lifted supply restrictions after it regained control of key ports from a splinter faction.

“We have the dynamic for a pull back,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA in London. “This is reinforced today by the lifting of the force majeure at Libyan ports, and the uncertainty around the economic outlook that an escalation in trade measures implies.”

Oil rose to a three-year high this month as disruptions from Canada to Venezuela, along with renewed U.S. sanctions on Iran, stoke fears of a supply crunch despite a pledge by OPEC and its allies to boost production. Risks are spreading with labor strikes in Norway and Gabon threatening output. Still, prices are about half of the record reached 10 years ago on this day.

Prices Slide

West Texas Intermediate crude for August delivery slid as much as 94 cents to $73.17 a barrel on the New York Mercantile Exchange and traded at $73.41 at 11:03 a.m. in London. The contract rose 26 cents on Tuesday. Total volume traded Wednesday was about 37 percent above the 100-day average.

Brent for September settlement fell as much as $2.10, or 2.7 percent, to $76.76 a barrel on the London-based ICE Futures Europe exchange, after climbing 79 cents on Tuesday. The global benchmark traded at a premium of $5.43 to WTI for the same month.

Futures for September delivery rose 0.4 percent to 506.9 yuan a barrel on the Shanghai International Energy Exchange, after climbing 1.5 percent on Tuesday.

Libya’s National Oil Corp. regained control of critical ports including Ras Lanuf and Es Sider which had fallen under the sway of a rival faction in the politically splintered country. NOC lifted force majeure at the terminals and shipments will resume within hours, according to a statement Wednesday.

If the U.S.’s proposed tariffs on Chinese goods go into effect, duties will cover nearly half of all American imports from the Asian nation. As well as consumer items including clothing, television components and refrigerators, the listincludes petroleum products such as motor fuels, kerosene and naphtha.

Sanctions Wavers

Meanwhile, America signaled it may take a softer approach to buyers of Iranian crude. It’s likely that some countries will seek an exemption from sanctions on oil purchases from the Islamic Republic, and the U.S. will consider these applications, Secretary of State Mike Pompeo said. In June, the State Department had said it’s pressing allies to end all crude imports by Nov. 4 and won’t offer any waivers or extensions to that timeline.

“The loss of Iranian oil exports will be significant come early November,” said BNP’s Tchilinguirian. “By hinting at the possibility of wiggle room in terms of waivers for allies that import Iranian crude, it lowers the expectation of how much Iranian exports will be lost.”

Other oil-market news:

* Supply risks look to be worsening, with a strike curtailing oil productionoff Norway for the first time in six years. Royal Dutch Shell Plc shut a North Sea field and workers threatened to escalate labor action at the weekend.
* Output was halted at several Total SA sites in Gabon after a strike started on Monday. In Venezuela, the oil-rig count declined for a sixth straight month to a 15-year low.
* U.S. crude stockpiles slid by 6.8 million barrels last week and those at the key storage hub in Cushing, Oklahoma, fell by 1.93 million barrels, the American Petroleum Institute was said to report.
* The American government sees oil production climbing further next year despite transportation logjams in the country’s most prolific shale play.

To contact the reporters on this story:
Grant Smith in London at gsmith52@bloomberg.net;
Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Rakteem Katakey, Alaric Nightingale