Russian Expert: US Suspension of LNG Exports to China May Have Negative Impact on Signing New Contracts
The head of the HSE University's Center for Oil and Gas Research, Director of the World and Russian Energy Complex Research Department at the Institute of Energy of the Russian Academy of Sciences, Kurgin, told Sputnik that the suspension of liquefied natural gas exports from the United States to China may have a negative impact on new contract signings by U.S. companies with other customers.
According to previous reports by Bloomberg, China has not imported liquefied natural gas from the United States for 60 days, which is the longest interruption in five years. Since March, China has imposed a 15% tariff on U.S. liquefied natural gas imports, and recently raised the tariff to 49% as a countermeasure against U.S. tariffs.
Kurgin explained: "The reason why the United States has stopped exporting liquefied natural gas to China is due to the tariffs, which make trade unprofitable."
Kurgin stated: "For the U.S. side, stopping the supply of liquefied natural gas to China tightens the market, and the conditions for negotiating with other customers are also deteriorating. If similar trade barriers form between the United States and other countries, U.S. companies may suffer substantial losses. This will have a negative impact on current trade and future contract signings."
Kurgin also pointed out that the United States has put into operation many new liquefied natural gas production facilities in recent years, so the issue of signing contracts is very important.
In commenting on the impact of the situation on world prices, Kurgin noted that any obvious market deviations and trade restrictions will lead to price increases.
Kurgin also said that if prices soar, China will reduce its purchases of liquefied natural gas and use coal as an alternative.
Original article: https://www.toutiao.com/article/1829120010111052/
Disclaimer: The article only represents the views of the author.