US Trade War Shifts Petroleum Gas Cargoes Away from China: What You Need to Know

In recent developments, the ongoing trade conflict between the United States and China has prompted several carriers transporting petroleum-based gases to alter their shipping routes. This shift reflects the growing tensions between the two economic giants and their impact on global supply chains. Over the past week, four shipments of propane have been redirected from China to alternative destinations, including Japan and South Korea, as reported by analytics firm Vortexa.

Trade Tensions Spark Shipping Changes

The recent adjustments in shipping routes highlight how the trade war is reshaping the dynamics of gas exports. Propane shipments, which previously saw robust trade with China, are now finding new avenues. As of now, at least one shipment of ethane, a key component in plastic manufacturing, has been completely canceled due to these escalating tensions.

Key Points of Impact:
- Four propane cargoes redirected to Japan and South Korea.
- One ethane shipment has been scrapped entirely.
- U.S. tariffs on Chinese imports have reached as high as 145%.

The Ongoing Shift in Exports

As the trade war escalates, the effects on shipping routes are becoming increasingly evident. While eight Very Large Gas Carriers are still on track to reach China this week, the four recent diversions have raised concerns among analysts. Ships like the Zakher, Maple Gas, BW Gemini, and Eiger Explorer have all changed course, leaving the U.S. Gulf Coast for other markets.

Notable Shipments:
- The G. Arete has redirected to South Korea.
- The chemical tanker STI Notting Hill is also heading to South Korea.

Impact on U.S. Exports

In 2024, the U.S. was exporting approximately 310,000 barrels of propane daily to China, marking a significant increase from the previous year. However, experts warn that the ongoing trade war may continue to disrupt these flows.

Future Implications:
- Spot shipments of ethane are likely to remain affected.
- Committed cargoes face challenges in adjustment due to existing contracts.

As tensions continue between the two largest economies, the global gas market will likely feel the repercussions, further complicating international trade and supply chain dynamics. Keeping an eye on these developments will be crucial for stakeholders in the energy sector.