Promised ‘Golden Age’ for Oil and Gas Jeopardized by Trump’s Trade War
China dumps the US and bets on Russia
By via The Liberty Beacon
Since March 2025, there has been a complete halt in the importation of US crude oil and American liquefied natural gas (LNG) into China, signifying a significant downturn in the energy trade between the two nations amidst an intensifying tariff conflict, as reported by energy traders in China.
This decline commenced merely two months prior, coinciding with the reinstatement of the Trump administration and the resurgence of a stringent trade policy. China represents a significant and expanding market for liquefied natural gas exports, especially from Texas. According to census data, energy exports constitute 39% of Texas’s total exports to China.
(Source: REUTERS/SCANPIX)
Long-Term Consequences for LNG Shipping and Challenges Ahead:
1. Decreased Tonne-Mile Demand: As China increases its LNG imports from neighboring countries, such as Russia, the reduction in long-haul voyages between the US and China will lead to a decline in overall tonne-mile production.
2. Insufficient Offsets from Other Regions: Increases in LNG shipments from Canada or Africa will not adequately compensate for the tonne-miles lost due to the diminished flow of LNG between the US and China.
3. Limited US-Asia Trade Growth: The lack of robust LNG trade between the US and China will hinder the expansion of US-Asia shipping, especially if demand in Europe begins to stabilise.
4. Increased Russian Pipeline Gas Supply: The development of initiatives like Power of Siberia 2 may further diminish the demand for LNG, thereby lowering the need for shipping services.
U.S.-China trade tensions have resurfaced, significantly impacting the global LNG market. The US has reinstated major tariffs, leading China to impose a 15% retaliatory tariff on US liquefied natural gas (LNG). Consequently, China has halted imports of US LNG, redirecting shipments to Europe and disrupting established trade routes. This shift is further supported by a 24% year-over-year drop in China’s LNG imports for the first quarter of 2025 and strong gas deliveries from Russia via the Power of Siberia pipeline…
IMAGE: The Yamal LNG liquefied natural gas plant in the seaport of Sabbeta on the western shore of the Ob Bay of the Kara Sea (Source: NS Energy)
Natalia Dembinskaya reports for RIA Novosti…
Step on the gas: China dumps the US and bets on Russia
“China may completely abandon American LNG” – Pavel Maryshev, economist
Amid the trade war, Beijing has suspended purchases of American liquefied natural gas. Analysts do not rule out that this will be the case for a long time. China plans to purchase even more LNG from Russia. What volumes are they counting on, and why Moscow will meet them halfway…
Stopped import
Last year, China received 8.3 million tons of LNG from Russia. This is the third figure after Australia (26.19) and Qatar (18.34). In fourth place is Malaysia – 7.69.
There were also American imports (4.2 million tons), but due to Trump’s unprecedented trade tariffs, Beijing stopped this.
According to Kpler and LSEG, China bought nothing from the US in March. And Bloomberg reports that this has been happening for more than 60 days. The only time it lasted longer was five years ago, during the previous trade standoff with Washington.
“Beijing is not risking anything. The contracted volumes will be resold, and new agreements will not be concluded,” explains Pavel Maryshev, a member of the expert council at the Russian Gas Society.
Additional fees and duties primarily affect suppliers from the external market. The domestic market is not being restructured overnight, so importers are redirecting resources to other countries, says Khadzhimurad Belkharoev, associate professor at the Institute of World Economy and Business of the RUDN University Faculty of Economics.
IMAGE: Arrival of two tankers with liquefied gas from the Yamal LNG project in China (Source: RIA Novosti / Evgeny Odinokov)
Buy from Russia
Even if the trade dispute is settled, China will be able to function effectively without relying on American supplies.
Beijing intends to increase purchases from stable and proven partners, in particular, Russia, noted the Chinese Ambassador to Moscow Zhang Hanhui at the Eurasian Oil and Gas Forum.
There are all the possibilities for this. In 2024, the country produced 34.7 million tons of LNG (5.4% more than in 2023), of which a record 33.6 million were exported. At the same time, the reorientation to Asia made it possible to compensate for losses in European markets. Up to 31 million cubic meters were pumped through the Power of Siberia pipeline alone.
“By the way, production at Arctic LNG-2 is resuming, which strangely coincided with the worsening of relations between Washington and Beijing. Perhaps this indicates China’s readiness to purchase even more gas,” Maryshev reasons
IMAGE: Tanker Sun Arrows loads its cargo of liquefied natural gas from the Sakhalin-2 project in the port of Prigorodnoye, Russia (Source: AP Photo)
Up to 100 million tons
The Power of Siberia 2 pipeline from Yamal in northern Russia to China via Mongolia would allow exports to be expanded, but its prospects are unclear.
Experts explain the freezing of the project by changes in the architecture of the international economy and the appearance of additional free volumes of LNG on the market.
“Global infrastructure projects that require significant investment and cooperation are gradually losing relevance. In addition, pipeline gas deprives the buyer of room to manoeuvre. By and large, investments in the “pipe” shackles the recipient for many years. This is why Chinese partners are so cautious in this matter. And the dynamics of the global LNG market allow us to expect further supply growth,” says Maryshev
By 2030, liquefied gas production will increase by at least 30%. This will probably be enough for the Chinese.
There are currently two large-capacity plants operating in Russia: Yamal LNG (design capacity: 17.4 million tons per year) and Sakhalin-2 (9.6). Novatek’s second facility, Arctic LNG-2, is partially ready, but was hit by US sanctions in November 2023. However, according to Reuters and Bloomberg, it has already shipped its first batches of fuel.
Within five years, it is planned to launch Murmansk LNG, Arctic LNG-1 and Ob LNG. This is another 47 million tons per year. All three projects should make a significant contribution to the implementation of the country’s energy strategy, according to which LNG production will reach 90-105 million tons per year by 2050.
IMAGE: Russian President Vladimir Putin at the ceremony of sending the first technological line for liquefying natural gas on gravity-based foundations as part of the Arctic LNG2 project at the Novatek-Murmansk Large-Tongue Offshore Construction Centre (Source: RIA Novosti / Media Bank)
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