Asia Looks to Buy More US Fossil Fuels to Make Trump Happy

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(Bloomberg) — Asian fossil fuel buyers looking to appease incoming U.S. President Donald Trump have reached the same conclusion: Buy more American oil and gas.

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The re-elected populist leader has threatened to impose tariffs on a number of countries that have trade surpluses with the United States, prompting policymakers in South Korea, Taiwan and Vietnam as well as the European Union to consider buying more energy from the world’s largest producer and exporter of crude oil. of liquefied natural gas.

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“Trading partners see buying U.S. LNG as helping in tariff negotiations with the Trump administration,” said Sol Cavonic, energy analyst at MST Marquee. He added that there has been a noticeable and rapid shift towards securing American supplies since Trump won the elections.

Such a shift would allow Trump – who has promised his voters an aggressive return to fossil fuels – to expand US LNG exports beyond the already planned doubling by 2030, as well as give US project developers an advantage over rival exporters.

Trump is expected to order changes to encourage domestic oil and gas development immediately after his inauguration on Monday. That could include lifting the moratorium imposed by his predecessor Joe Biden on new licenses for LNG export projects — a policy that slowed new sales agreements from 38 in 2022 to just seven last year, according to data from BloombergNEF.

Kazuhiro Ikebe, president of Japan’s Kyushu Regional Electric Power Company, said increased LNG production from the United States is “bright news” for the utility industry because it could stabilize prices. Buyers have been facing volatile gas prices since the start of the war in Ukraine. In 2022.

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In countries such as Japan and Thailand, buyers have resumed talks with US LNG export projects over the past few months, according to traders involved in the negotiations, who added that they are keen to sign deals with the US if the price is right.

Nearly half of U.S. LNG exports went to Europe last year, according to ship-tracking data compiled by Bloomberg. The loss of gas flows through Russian pipelines at the beginning of the year means that the continent may also turn to US supplies to fill the gap. Last month, Trump warned the European Union that its goods would be subject to US tariffs if member states did not buy more US oil and gas.

The trading unit of DTEK, Ukraine’s largest private energy company, said last month that it aims to bring a steady supply of US liquefied natural gas to Ukraine. “The current management has supported the supply of gas to Europe,” said Dmytro Sakharok, CEO of D.Trading. “We believe that during the next administration this will be more active.”

The market is unlikely to see any immediate impact. Importers will not be able to easily increase their purchases from the United States over the next few years, as much of the country’s current production is already tied to long-term contracts. Instead, traders negotiating with US exporters say they are thinking about securing billions worth of supplies, without which the proposed US projects – which could take years to build – would not go ahead.

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Even the long-delayed Alaska LNG project, which has been in the works for more than a decade, could go ahead under Trump.

The new administration is also expected to use the country’s dominance in the liquefied natural gas sector to make gains elsewhere, such as in the escalating trade war with rival China. Marco Rubio, his pick for secretary of state, said LNG should be used as “leverage” in talks with China – the world’s largest importer of the cryogenic fuel.

The threats actually seem to be working.

European Commission President Ursula von der Leyen was quick to discuss LNG exports with Trump shortly after his election victory in November, saying the American fuel could help replace robust Russian shipments in Europe.

“Other countries are all talking about how they need to reduce the growing trade deficit under the Trump administration,” South Korean Minister of Trade, Industry and Energy Ahn Duk-gyun said Thursday. “Everyone says they all want American energy.”

-With assistance from Heesu Lee, Shoko Oda, Anna Shiryevskaya, and Ruth Liao.

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