China’s pivot away from U.S. liquefied petroleum gas under new tariffs is shaking global energy flows, slashing demand, and fuelling a scramble for alternatives across Asia, with Middle Eastern suppliers and rival buyers seizing the moment.
The global market for liquefied petroleum gas (LPG) is undergoing a dramatic reordering as Chinese buyers pull away from U.S. cargoes ahead of new tariffs, opting instead for alternatives from the Middle East. The shift is already dragging down U.S. prices and redrawing shipping routes across Asia and Europe.
The tariff move, effective May 14, is the latest blow in a widening trade dispute between Washington and Beijing. China, once a leading customer for American propane and ethane, is now racing to reroute contracts. That’s sending shockwaves through the supply chain — from Texas shale fields to Chinese petrochemical plants.
American shale drillers, facing oversupply at home, rely on overseas demand for profitability. Meanwhile, Chinese firms have built their production around cheap U.S. feedstocks. Now both sides are set to lose ground.
“There’s a certain amount of flows that could be redirected, but you can’t shift 400,000 barrels per day to just any market,” said Julian Renton of East Daley Analytics.
China, the second-largest buyer of U.S. LPG after Japan, imported 17.3 million tonnes of American propane last year — around 60% of its total LPG imports, customs data show. A sudden loss of that supply will leave a sizeable gap.
As China pivots, others are stepping in. India, Japan, and South Korea have increased purchases of discounted U.S. LPG. April shipments to Japan nearly doubled, according to ship-tracker Kpler. Middle Eastern producers, meanwhile, are enjoying a price premium in China, as tight supply pushes costs $30–$60 above Saudi Contract Price — double what it was before the tariffs.
“Winners should be all other buyers and Middle East exporters,” said Cheryl Liu of Energy Aspects. “Losers, I would say, both China and the U.S.”
Indian refiners, for example, have asked suppliers to swap their long-term Middle East contracts with cheaper U.S. cargoes. Japanese traders are also capitalising on the discount, snapping up shipments for late April and May.
But there’s a limit. Chinese importers are resisting swap fees above $50 per tonne for second-half May arrivals, even as sellers continue to demand higher premiums. Meanwhile, ethane buyers — reliant solely on U.S. supply — are seeking waivers from Beijing to avoid disruption to their operations.
The Energy Information Administration expects U.S. exports to China to fall by around 200,000 barrels per day over the coming months. That could drive up inventories at home, putting fresh pressure on already-softening prices.
Energy Aspects estimates China’s LPG demand could shrink by 150,000 bpd in the second half of 2025. To fill the gap, naphtha use is projected to rise by nearly the same amount — 140,000 bpd. But that won’t fully compensate for the missing U.S. cargoes.
According to Argus Media, the actual supply shortfall may be as high as 1 million tonnes per month.
As the trade war reverberates, the reshuffling is not just about who buys what — it’s redrawing the competitive landscape. For now, China and the U.S. are paying the price, while the rest of Asia cashes in. But with global demand rising and the market already tight, the new balance may prove short-lived.
Azerbaijan has emerged as a critical transportation hub in China's Belt and Road Initiative, transforming from a regional energy exporter into a vital link connecting Chinese goods with European markets.
As the US-China trade standoff intensifies, Beijing has released a striking video vowing to resist pressure and uphold its global trade role, accusing Washington of economic coercion.
China rejected U.S. President Donald Trump's accusations of breaching a recent trade agreement, labeling them as "groundless" and warning it will respond decisively to protect its economic interests.
China has issued a formal protest against the United States over recent remarks by Defence Secretary Pete Hegseth, accusing Washington of “vilifying” Beijing and promoting confrontation in the Indo-Pacific.
A Chinese military official on Saturday rejected U.S. allegations about Beijing’s regional behavior, accusing Washington of destabilizing the Asia-Pacific region.
Azerbaijan and Iran have reached a key agreement on the operation mode and water allocation of the Araz reservoir, following the 54th meeting of the Permanent Joint Commission on the shared use of the Araz River's water and energy resources, held in Baku.
Azerbaijan has emerged as a critical transportation hub in China's Belt and Road Initiative, transforming from a regional energy exporter into a vital link connecting Chinese goods with European markets.
The election of nationalist Karol Nawrocki as Poland’s new president marks a significant political shift that could complicate the country’s relations with both the European Union and Ukraine,
Heavy flooding has wreaked havoc in southwestern China’s Yunnan province, destroying dozens of homes and vital infrastructure in the Nujiang Lisu Autonomous Prefecture, local authorities reported on Monday.
UN Headquarters in New York, powerful voices from France’s overseas territories accused Paris of sustaining colonial control under new names, demanding sovereignty, reparations, and justice for people of African descent.
On May 28, the inauguration ceremony of Lachin International Airport was held.
A car drove into crowds of Liverpool fans celebrating the club’s Premier League title in the city centre on Monday evening, injuring dozens including 4 children. A 53-year-old man believed to be the driver was arrested at the scene.
Taxi drivers across France are protesting government plans to cut payments for driving patients to medical appointments. These cuts are part of a broader effort by Prime Minister François Bayrou to save €40 billion in the 2026 budget and reduce the country’s large deficit.
EU ministers have greenlit a massive €150 billion defense investment fund—dubbed the Security Action for Europe (SAFE)—as the bloc ramps up its military readiness in response to Russia’s aggression and growing uncertainty over U.S. security guarantees.
Brazil’s economy is expected to have regained momentum in the first quarter of 2025, driven by a surge in household spending and private investment, according to a Reuters poll of economists conducted from May 21–26.
The State Oil Company of Azerbaijan (SOCAR) and Canada’s Gran Tierra Energy Inc. signed a Memorandum of Understanding on the sidelines of the 30th Anniversary International Caspian Oil and Gas Exhibition held as part of Baku Energy Week.
Heavy flooding has wreaked havoc in southwestern China’s Yunnan province, destroying dozens of homes and vital infrastructure in the Nujiang Lisu Autonomous Prefecture, local authorities reported on Monday.
UN Headquarters in New York, powerful voices from France’s overseas territories accused Paris of sustaining colonial control under new names, demanding sovereignty, reparations, and justice for people of African descent.
Karol Nawrocki’s narrow win in Poland’s presidential race signals a sharp turn in tone toward both the European Union and Ukraine, raising questions over Warsaw’s future alignment in Central Europe.
In a significant development toward de-escalating the ongoing war, Russia on Monday formally presented Ukraine with a comprehensive peace proposal, outlining steps for a full ceasefire and a long-term peace agreement, according to Vladimir Medinsky, head of the Russian delegation.
Azerbaijan and Iran have reached a key agreement on the operation mode and water allocation of the Araz reservoir, following the 54th meeting of the Permanent Joint Commission on the shared use of the Araz River's water and energy resources, held in Baku.
Azerbaijan has emerged as a critical transportation hub in China's Belt and Road Initiative, transforming from a regional energy exporter into a vital link connecting Chinese goods with European markets.
The election of nationalist Karol Nawrocki as Poland’s new president marks a significant political shift that could complicate the country’s relations with both the European Union and Ukraine,
Heavy flooding has wreaked havoc in southwestern China’s Yunnan province, destroying dozens of homes and vital infrastructure in the Nujiang Lisu Autonomous Prefecture, local authorities reported on Monday.
UN Headquarters in New York, powerful voices from France’s overseas territories accused Paris of sustaining colonial control under new names, demanding sovereignty, reparations, and justice for people of African descent.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment