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.
Oil prices fell after the U.S. expanded economic sanctions on Iran, as Tehran vowed to retaliate and warned it had tools to respond, raising concer...
Kyiv has recently received a small number of U.S.-made Patriot interceptors capable of downing Russian ballistic miss...
Country music legend Dolly Parton, whose songs, unmistakable style and warmth made her one of America’s most enduring entertainers, has died ...
Oil prices fell after the U.S. expanded economic sanctions on Iran, as Tehran vowed to retaliate and warned it had tools to respond, raising concerns over potential disruption to regional oil supplies.
Ukraine’s President Volodymyr Zelenskyy said on Monday that Kyiv wants peace but will not surrender to Russia, as foreign leaders joined Independence Day events marking 35 years since Ukraine’s independence.
Kyiv has recently received a small number of U.S.-made Patriot interceptors capable of downing Russian ballistic missiles, Ukrainian President Volodymyr Zelenskyy has said. It comes as Britain and France pledged stronger military support for Ukraine.
Only four commodity vessels crossed the Strait of Hormuz on Sunday, following 13 transits a day earlier, as disruptions continue to restrict traffic through the key energy chokepoint.
A newly created pro-government political party has secured a commanding victory in Kazakhstan's snap parliamentary election, according to exit polls, strengthening President Kassym-Jomart Tokayev's influence at a pivotal moment in the country's political transition.
Kyiv has recently received a small number of U.S.-made Patriot interceptors capable of downing Russian ballistic missiles, Ukrainian President Volodymyr Zelenskyy has said. It comes as Britain and France pledged stronger military support for Ukraine.
Canada has announced nearly $20 billion in retaliatory tariffs on U.S. goods and billions in support for workers and businesses, escalating its trade dispute with Washington after President Donald Trump's latest duties took effect.
Pakistani exporters are facing soaring shipping costs to the U.S., with freight rates more than tripling on some routes as the Iran-U.S. conflict drives up war-risk insurance and fuel costs.
The trial of a Libyan man accused of building the bomb that destroyed Pan Am Flight 103 over the Scottish town of Lockerbie in 1988, killing 270 people, has been postponed by a U.S. federal judge.
France and Saudi Arabia have agreed on plans for a $7 billion manga-themed amusement complex near Paris, inspired by the hugely popular Japanese franchise Dragon Ball Z.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment