China stops buying US liquefied natural gas amid growing purchases from Russia

China has stopped purchasing liquefied natural gas (LNG) from the United States following the imposition of a 15% tariff on US LNG imports on 10 February.

As reported by The New York Times, ship tracking data indicates that Beijing is continuing to distance itself from the US economy. China's imports of LNG from the United States plummeted to very low levels between November and January, according to Chinese customs data.

Instead, Beijing has increased its purchases of Russian LNG, with Moscow supplying four times more LNG to China last year than the United States.

Only two US LNG cargo ships were en route to China at the time Beijing imposed a 15% tariff on US fossil fuel imports, retaliating against a 10% tariff imposed on Chinese goods by US President Donald Trump.

Belgian energy firm Kpler reported that one of the ships managed to unload its cargo before the tariffs came into force, while the other was diverted to Bangladesh to avoid the new charges.

Following Russia's full-scale invasion of Ukraine in 2022, European countries largely stopped buying Russian natural gas, causing Russian gas prices to drop. Meanwhile, European companies are paying significantly higher prices for LNG from alternative sources, including the United States.

This has allowed Chinese companies to purchase large volumes of Russian gas at a lower cost than American LNG.

LNG supplies from the United States to China surged after Beijing and Washington signed a trade agreement in January 2020, which included a pledge by China to increase purchases of US gas, though not necessarily for domestic use.

However, these volumes dropped sharply in 2022, as American LNG was redirected to Europe, where it fetched higher prices after European countries halted purchases of Russian gas.

According to China's customs agency, US gas accounted for just 3% of China’s total natural gas imports last year.

Meanwhile, European Commission officials have abandoned plans to include a ban on Russian LNG in the latest sanctions package against Moscow.

Instead, the Commission intends to develop a new roadmap to end the EU's dependence on Russian energy by 2027.