China Halts US LNG Imports Amid Tariff War
China has not imported liquefied natural gas (LNG) from the United States since early February, as the tariff war has impacted energy trade and could have long-term consequences for U.S. LNG export contracts. The last LNG cargo to arrive in China from America was a tanker from Corpus Christi, which docked in the southern Chinese province of Fujian on February 6.
Analysts warn that the Chinese tariffs on U.S. goods, including energy products, and the broader trade war between the two biggest economies in the world could have long-term effects on the ability of new U.S. LNG export projects to attract anchor offtake commitments. Anne-Sophie Corbeau, a gas specialist at Columbia University’s Center on Global Energy Policy, told the Financial Times, “I do not think Chinese LNG importers will ever contract any new US LNG.”
Since the escalation of the U.S.-China trade war, Chinese LNG buyers have been reselling the cargoes they are buying from the U.S. due to the rising costs of U.S. LNG imports caused by Chinese tariffs on American goods. With comfortably full winter inventories, LNG import demand in China has been weaker this year. BloombergNEF estimates that Chinese LNG imports are expected to drop this year, marking the first annual decline since 2022.
The trade war and the new tariffs on U.S. LNG have led major Chinese LNG buyers to halt imports from the United States and resell the cargoes they have already purchased or contracted. Chinese LNG buyers with long-term supply contracts with U.S. producers have begun reselling the cargoes to Europe, while Chinese traders are now seeking long-term deals with gas producers in the Middle East and the Asia Pacific instead of committing to future supply from the United States.
This shift in LNG trade dynamics between China and the United States could have significant implications for the global energy market and impact the financial performance of companies involved in LNG export projects. Investors and individuals in the energy sector should closely monitor these developments to assess potential risks and opportunities in their investment portfolios and financial decisions.