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 US President Donald Trump have come to the same conclusion: buy more American oil and gas.

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The re-elected populist leader has threatened tariffs against a number of nations that have trade surpluses with the US, prompting policymakers from South Korea, Taiwan, Vietnam and also the European Union to consider procuring more energy from the world’s biggest producer of crude and exporter of liquefied natural gas. 

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“Trade partners see buying US LNG as aiding in tariff negotiations with the Trump administration,” said Saul Kavonic, an energy analyst at MST Marquee. There’s been a noticeable and rapid shift toward securing US supply since Trump’s election win, he added.

Such a shift would allow Trump — who has promised his voters a hard pivot back to fossil fuels — to expand US LNG exports beyond the already planned doubling by 2030, as well as give American project developers an edge over rival exporters.

Trump is expected to order changes to encourage domestic oil and gas development immediately after his inauguration on Monday. This could include lifting his predecessor Joe Biden’s moratorium on fresh 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. 

More LNG production from the US is “bright news” for the utilities industry as it could stabilize prices, said Kazuhiro Ikebe, president of Japanese regional power producer Kyushu Electric Power Co. Buyers have been grappling with volatile gas prices since the war in Ukraine began in 2022.

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In countries including Japan and Thailand, buyers have renewed talks with US LNG export projects over the last few months, according to traders participating in the negotiations, who added they are eager to sign deals with the US if the price is right. 

Roughly half of US LNG exports went to Europe last year, according to ship-tracking data compiled by Bloomberg. And the loss of Russian pipeline gas flows at the start of the year means the continent may also turn to US supply to plug that gap. Trump last month warned the EU that its goods will get hit with US tariffs if its member states don’t buy more American oil and gas. 

The trading unit of DTEK, Ukraine’s largest private energy firm, said last month it aims to bring a steady supply of US LNG into Ukraine. “The current administration supported the supply of gas to Europe,” said D.Trading Chief Executive Officer Dmytro Sakharuk. “And we believe that during the next administration that will be even more active.”

The market is unlikely to see any immediate impact. Importers can’t easily boost purchases from the US over the next few years, as much of the nation’s current output is already tied up in long-term contracts. Instead, traders negotiating with US exporters say they are considering locking in supply worth billions, without which proposed US projects – which would take years to build — wouldn’t 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 potentially move forward under Trump.

The new administration is also expected to use the nation’s dominance in the LNG sector for gains elsewhere, like in an escalating trade war with rival China. His pick for secretary of state Marco Rubio has said LNG should be used as “leverage” in talks with China — the world’s top importer of the super-chilled fuel.

The threats already 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 American fuel could help replace still strong Russian shipments in Europe.

“Other countries are all talking about how they need to reduce the growing trade deficit under the Trump administration,” South Korea’s Minister of Trade, Industry and Energy Ahn Duk-geun said on Thursday. “Everyone’s saying they all want US energy.”

—With assistance from Heesu Lee, Shoko Oda, Anna Shiryaevskaya and Ruth Liao.

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