US LNG Vessels Head to China Following Trump-Xi Summit

• Four LNG tankers from Cheniere Energy and Venture Global departed Louisiana between May 5-18, expected to reach China's Tianjin port June 15-28
• Iran's conflict shut the Strait of Hormuz and damaged Qatar's facilities, cutting 10 billion cubic feet per day of LNG supply while pushing European gas prices to $17/mmBtu and Asian prices to $19/mmBtu
• China maintains a 25% retaliatory tariff on U.S. LNG, identified by S&P Global as the biggest obstacle to trade revival, while U.S. Henry Hub gas remains much cheaper at around $3/mmBtu

Summary: US LNG Vessels Head to China Following Trump-Xi Summit

Four liquefied natural gas (LNG) vessels are en route from the United States to China, marking the first direct shipments during President Trump's second term. The vessels are expected to arrive at China's Tianjin port between June 15-28, following the Trump-Xi summit last week where the President indicated China's interest in purchasing U.S. oil and LNG.

Key Shipment Details:

• One vessel departed from Cheniere Energy's Sabine Pass facility (May 5)
• Three vessels departed from Venture Global's Plaquemines plant (May 8-18)
• Both companies are the largest and second-largest U.S. LNG producers

Trade Barriers:

Despite these shipments, China maintains a 25% tariff on U.S. LNG—a retaliatory measure from earlier U.S. tariffs—which S&P Global identifies as the primary obstacle to full trade revival between the world's biggest gas importer and largest exporter.

Market Context:

Global gas prices have surged due to the Iran conflict, which effectively closed the Strait of Hormuz and disrupted Qatari LNG facilities, removing approximately 10 billion cubic feet per day (20% of global LNG supply).

Current Price Points:

• European TTF benchmark: ~$17/mmBtu (six-week high)
• Asian JKM benchmark: ~$19/mmBtu (four-week high)
• U.S. Henry Hub: ~$3/mmBtu (seven-week high)

The significant price differential—U.S. gas remains substantially cheaper than European and Asian markets—may incentivize Chinese buyers to absorb the tariff costs, particularly given current supply constraints and elevated global prices.