Trading houses and some of the world’s biggest energy companies stand to gain from the retaliatory tariffs China is imposing on liquefied natural gas from the US.
Beijing’s 15% levies open the opportunity for traders and oil supermajors to resell US cargoes on behalf of Chinese buyers in exchange for gas from other regions, pocketing a fee for the service.
Within hours of the tariffs being announced recently, Chinese LNG buyers were inquiring with counterparts in Asia and Europe about swapping US shipments for cargoes from elsewhere, according to traders who asked not to be identified because they’re not authorized to speak to media.
Trading houses including Vitol Group and Trafigura, along with Shell Plc, TotalEnergies SE and other oil giants, are positioned to help facilitate those deals, thanks to their access to supplies of LNG around the globe.
In October, Vitol reached a swap agreement with China Gas for future supply from the US, potentially a foreshadowing of other transactions that could come as Chinese LNG buyers consider existing and future supply from US projects.
In the US, Beijing’s tariffs threaten to make it more difficult for LNG suppliers to compete against Qatar and others in the Middle East when it comes to lining up long-term deals to sell to China, according to senior figures in the LNG industry. Any pending discussions between US companies and Chinese buyers are effectively on ice now, they said.
China, which bought about 6% of US LNG exports last year, imposed the duties after President Donald Trump announced tariffs on goods from Beijing. The Chinese levies were scheduled to go into effect February 10.
The US is the world’s largest LNG exporter, supplying about 4.3mn metric tonnes of the fuel in 2024 to China, according to shipping data compiled by Bloomberg. Producers with existing and future long-term contracts with Chinese buyers include Cheniere Energy Inc, Venture Global Inc and NextDecade Corp.
The companies didn’t immediately comment.
The Trump administration plans to use gas exports as leverage to expand US influence in Europe and Asia, but the trade fight threatens to drives a wedge between the nation’s exporters and prospective Chinese buyers for longer-term contracts.
“We urge the administration to ensure that US LNG remains a priority in trade negotiations and that barriers to our energy leadership are swiftly removed,” said Charlie Riedl, executive director of the trade group Center for LNG.
An LNG tanker is docked at the Cheniere Liquefaction facility in Corpus Christi, Texas. The US is the world’s largest LNG exporter, supplying about 4.3mn metric tons of the fuel in 2024 to China, according to shipping data compiled by Bloomberg.
