China Resells U.S. LNG Amid Tariff Row | OilPrice.com
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Breaking News:
The trade war is prompting China’s LNG buyers to resell the cargoes they are buying from the U.S. as Chinese tariffs on American goods are raising the costs of U.S. LNG imports, analysts and traders have told Reuters.
LNG import demand in China has been weaker this year amid comfortably full winter inventories. Chinese LNG imports are expected to drop this year, according to the latest estimates from BloombergNEF. China is set to see the first annual decline in LNG imports since 2022.
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The trade war and the new tariffs on U.S. LNG are driving major Chinese LNG buyers to stop imports from the United States and resell the cargoes they have already bought or contracted, according to multiple sources who spoke to Reuters.
China imposed a 15% tariff on U.S. LNG imports in early February following the first round of tariffs announced by U.S. President Donald Trump. There will be higher tariffs on American goods as of April 10—these will be another 34% to match the latest U.S. tariffs announced last week.
Chinese buyers were already halting U.S. LNG imports with the 15% tariff and the higher import levies will completely stop these imports, according to traders.
A month ago, Bloomberg reported that China had not received a single cargo of U.S. liquefied natural gas in 40 days and there are currently no LNG tankers en route to the country.
Following the tariffs, Chinese LNG buyers with long-term supply contracts with U.S. producers have started reselling the cargoes to Europe, Bloomberg reported, citing trading sources. What’s more, Chinese traders have grown cold towards new long-term commitments for future supply from the United States, instead seeking long-term deals with gas producers in the Middle East and the Asia Pacific.
The stretch of no U.S. imports into China has extended now to 60 days, which is the longest gap since the trade war during President Trump’s first term in office, according to Bloomberg’s estimates.
As China is reselling U.S. LNG cargoes in other Asian countries and in Europe, the reselling spree is good news for Europe’s efforts to refill its natural gas storage ahead of the next winter.
By Tsvetana Paraskova for Oilprice.com
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