LNG

One US LNG cargo reached China on 16 July, the first in seventeen months, but it may never be imported. Our tracking shows the Al Fat'h diverted from Huizhou, an ordinary customs berth, to bonded Yangpu, where a cargo can wait, clear customs, or leave again with duty never falling due. Which of those happens is not yet knowable, and Beijing's tariff on US LNG still stands.

China wants to buy more American oil and may lift its 25% tariff on US LNG imports as “energy is the one thing they really need,” President Donald Trump told Fox News. Beijing could unilaterally approve the resumption of US LNG imports, but the country has proven resilient to Qatari supply disruptions in the third month of the Middle East conflict.

Nhon Trach 3&4, Vietnam’s first two LNG-fired power plants were inaugurated on Sunday. The US$1.4 billion, 1.6 GW project secured US$1.1 billion in financing – without state guarantees.

The Trump administration has started to implement a landmark trade deal by lowering auto tariffs to 15% – now the onus is on the EU to purchase $750 billion in US LNG, oil, and nuclear energy products by 2028. Additional long-term deliveries of US LNG will help the EU bring forward its ban on Russian LNG imports to January 2027.

Europe’s future US LNG imports are poised to soar on the EU’s promise to import $750 billion in American energy products over the next three years. This promise was made by European Commission President Ursula von der Leyen to U.S. President Donald Trump in a bid to avert punitive tariffs from August 1.

Trump trade policies could deeply impact global gas markets: “His opening salvo in a US-China trade war has been fired, with 10% tariffs on Chinese goods and retaliatory 15% tariffs on US LNG, while his stance on Russia remains unclear," Rystad Energy commented. Closer to home, Trump's 10% tariff on Canadian gas drives up prices, squeezes profit margins of smaller producers and could potentially lead to production cuts and delayed investments.

The new US administration is pushing for deregulation and American energy dominance on global markets by fast-tracking permitting for LNG terminals and related infrastructure. Such policies are poised to boost oil and gas production and underpin US LNG export growth.

President-elect Donald Trump has already outlined a radical shift in US energy policies which is expected to spur investment in the upstream sector, as well as related pipelines to bring shale oil and gas from America’s major unconventional oil and gas basins to liquefaction terminals along the US Gulf Coast. Rising shale oil and gas production is bound to create a supply length and free up additional gas resources for liquefaction and export, as well as for the American downstream market, notably for the power gen and industrial sector, analysts at Rystad Energy reckon.

In his pro-energy agenda, Trump vowed to override and reverse Biden-era regulatory pauses on US LNG export projects and increase leases on federal land for fracking of unconventional oil and gas. If implemented, these policies could almost double US LNG export capacity from currently 11.3 billion cubic feet per day (Bcfd) in 2023 to 22.4 Bcfd in 2030 – especially if major projects like Texas LNG and Calcasieu Pass (CP2) move forward, analysts noted. CP2 attracted extra scrutiny from climate campaigners as the single largest LNG project proposed to date.

Such an expansion is deemed “crucial” for the United States to stay a major player in the global LNG market, where demand is forecast to reach nearly 600 million tons (Mt) in 2030. Based on currently producing and under-development projects, a supply gap of 140 Mt will materialize in 2035 – but considering the turn-around in US energy policy, Rystad Energy CEO Jarad Rystad is optimistic:

“We’re moving from a time of energy scarcity to a time of energy abundance,” he commented. Capacity additions in both fossil fuels and renewables will, in his view, outpace increases in demand in 2025.

Europe bargains for US LNG

Looking at the global supply picture, expanded US LNG production and exports could be used as a bargaining chip by the Trump administration in trade negotiations with Europe, Russia and other major economies in Asia.

“Europe is still searching for reliable, long-term alternatives to Russian piped gas and LNG supply, while China-US LNG trade is likely to be affected by tariffs,” said Rystad Energy’s head of North America Gas & LNG Research, Emily McClain.

European leaders have already hinted at using US LNG purchases as a bargaining tool to avoid potential trade tariffs under Trump’s administration. “By aligning energy policies and prioritizing US imports, Europe could secure a stable energy supply while fostering stronger transatlantic relations,” she suggested.

Trade tariffs 2.0 risk to push up energy prices

Trump has a legacy of levying trade tariff during his first administration which has been a great cause of concern about policy risks on the future cost of LNG and global trade. A 25% steel tariff, for instance – as implemented in 2018 –led to significant price increases for LNG projects. And this trend that could repeat under Trump 2.0.

Another trade war with China, meanwhile, could disrupt the flow of LNG between the two countries, just as it did in 2019 when LNG exports were halted. “Such tariffs would not only elevate capital expenses for LNG projects,” McClain warned, “[they would] also risk slowing contracting activity with key buyers like China, jeopardizing long-term export growth.”

On the other hand, there is a risk of oversupply on global LNG markets especially if multiple new US LNG projects move forward simultaneously. An oversaturated market could erode prices, disadvantaging US producers compared to competitors like Qatar and Australia, analysts noted. But reliable US supply would also unlock new demand, particularly from price-sensitive markets in Asia – if executed strategically.

Germany's state financing body KfW has agreed a $200 million loan with Indonesia on the grounds of adjustments to fuel and electricity tariffs, e.g. higher tariff-cost-coverage, feed-in tariffs and standards for demand-side response, board member Dr Norbert Kloppenburg said. In parallel, the Asian Development Bank (ADB) and the World Bank are granting loans of $500 million each in a first tranche, while the French counterpart AfD plans a contribution of $150 million.