China’s imports of US liquefied natural gas (LNG) plummeted to zero in March, marking a significant disruption to energy trade between the world’s two largest economies, Bloomberg reports.
This cessation of purchases follows a sharp decline in January and February and highlights the escalating impact of the ongoing trade war.
The overall delivery of US LNG to China in the first quarter of 2025 fell by a staggering 70% compared to the same period last year. This suspension is the longest since the previous trade tensions under US President Trump, when China went without US LNG shipments for approximately 400 days.
The resurgence of geopolitical conflict is decoupling the once-intertwined LNG markets. Escalating tariffs have led China to impose a 125% tariff on US goods, prompting a shift in sourcing towards suppliers like Indonesia and Qatar.
The downturn in LNG imports is not limited to the US, with total imports falling below previous-year levels for the past five months. March witnessed the most dramatic slump, with a 24.5% drop representing the steepest decline since November 2022. While pipeline gas imports, primarily from Russia, saw a marginal increase in the first quarter, overall volumes remain lower than those of seaborne LNG shipments.
According to Daniela Li, an analyst at BloombergNEF, China is increasingly relying on coal and renewable energy sources to safeguard its energy security against the volatility of the LNG spot market caused by trade tensions.
Li projects that LNG imports could be slashed by as much as 12% compared to last year if the punitive tariffs remain above 100% for the next six months.
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