Energy: "Wood Mackenzie comments on US-China Phase 1 trade agreement"

As noted in the earlier post on the EIA's Weekly Update, average daily U.S. LNG exports were up 66% in 2019 over 2018. Reopening the China market could potentially double that again although Russia is very serious about capturing that market share.

From LNG Industry, January 16:

Following the phase 1 signing of the trade agreement between the US and China, Wood Mackenzie Asia Pacific Vice Chair, Gavin Thompson, has provided his thoughts on the matter.

Thompson said: “With the ink now dry on the Phase 1 US-China trade deal we’ve considered what this means for energy trade between the two countries.

“From an energy perspective, what is most notable is China’s agreement to increase energy imports from the US by up to US$52.4 billion from the US over the next two years as a part of a commitment to spend around US$200 billion more on US goods and services than it did in 2017.

“Let’s be clear; US$52.4 billion over two years is a lot of energy. But neither the 5% tariff on US crude oil nor the 25% tariff on US LNG is to be reduced or removed by China under the Phase 1 deal. For China to massively increase imports of oil and LNG from the US while tariffs remain in place is going to be challenging.

“Consider LNG.....MORE