China is moving to resume large-scale purchases of US liquefied natural gas (LNG) and crude oil, as supply disruptions in the Middle East and tightening fuel markets across Asia force Beijing to recalibrate its energy strategy.
Some observers see the move as a significant concession by Beijing, or even a strategic reward for Washington, after China halted LNG imports to the US as early as 2025 as trade tensions escalated under US President Donald Trump’s tariff measures.
In return, China will have enough fuel supplies to resume gasoline exports to Asian countries, helping it maintain market share and increase political influence in the region amid tightening fuel supplies. On March 11, the National Development and Reform Commission (NDRC) ordered a ban on exports of gasoline, diesel and aviation fuel.
According to Nikkei Asia, China is RESTARTING US energy imports, with tanker tracking data showing that about 600,000 barrels per day of US crude are scheduled to be loaded in April. The change marks a resumption of energy trade between the United States and China after a suspension of purchases caused by earlier trade tensions.
Industry resources said Reuters that China is likely to extend its refined fuel export restrictions until April, with limited exemptions for countries facing acute shortages. Talks are underway to allow small volumes of oil, jet fuel and gasoline into Southeast Asian markets.
Export quotas for April could range from around 150,000 to 300,000 metric tonnes, with possible shipments to Bangladesh, Myanmar, Sri Lanka, Maldives and Vietnam. The selective easing underscores Beijing’s efforts to maintain regional market influence by managing tight domestic supply.
China’s resumption of purchases of US crude oil and LNG appears to reflect limited strategic flexibility for Beijing, as supply disruptions from Venezuela and the Middle East limit its options.
However, Chinese state media and commentators have framed the development differently, portraying it as a competitive victory over Japan in securing US energy supplies.
“Japanese Prime Minister Sanae Takaichi returned from the US with ‘alliance commitments’, only to see China rapidly securing large volumes of US crude oil and LNG that Japan had hoped to receive,” Liang Mi, a columnist based in Sichuan. writes in a Thursday article.
He says Tokyo had made every gesture and shown complete “sincerity” to the US to secure energy supplies, but failed to match China’s scale.
“China is buying about 600,000 barrels a day, or roughly 18 million barrels a month, worth about $10 billion at current prices,” Liang says. “Japanese refiners reserved only about 3 million barrels for April, equivalent to China’s five-day purchases. The US does not prioritize allies, it prioritizes its own interests.”
“As the world’s largest energy importer, China has a strong and steady demand for crude oil and natural gas. Whoever buys more can have a higher priority,” he says.
He adds that China’s decision to resume large-scale energy purchases from the US comes ahead of a planned leaders’ meeting between Beijing and Washington in May and that the agreement helps create a more constructive atmosphere for high-level dialogue.
Trump will visit China and meet with Chinese President Xi Jinping on May 13-14.
Lack of fuel
Since the US and Israel launched attacks on Iran on February 28, tanker traffic through the Strait of Hormuz has dropped sharply amid the threat of Iranian drone and missile attacks.
By early March, supply disruptions had begun to increase across Asia, with Thailand suspension fuel exports on March 6 and China stopping Gasoline and diesel exports on March 11, tightening regional availability.
The impact has been severe across Asia. In Southeast Asia, over 40% of gas stations in Laos have closed and outages in Cambodia and Thailand have prompted rationing and price controls, while many flights to Vietnam have been canceled due to aviation fuel shortages following China’s export ban.
In South Asia, India, Pakistan and Bangladesh face rising prices and emergency storage due to reliance on Middle Eastern supply. Even Japan and South Korea, despite reserves, remain exposed to disruption through the Strait of Hormuz.
Beijing now appears to see the situation as an opportunity to criticize the US and expand its political influence in Asia.
“The main cause of the fuel shortage facing the global energy market lies in the tense situation in the Middle East,” Chinese Foreign Ministry spokesman Mao Ning. said on Thursday. “The urgent task is to end US military operations immediately and prevent unrest in the Middle East from further affecting the global economy.”
“Many people underestimate China’s oil industry, assuming that it relies heavily on imports.” writes a Fujian-based commentator using the pen name Chenkai. “In fact, China’s gross domestic production has reached about 200 million tons per year, and with strategic reserves of about 270 million tons, well above the 90-day safety standard. China can sustain itself for more than a year even if imports are cut off.”
He says that by halting fuel exports, China has effectively cut off part of the global supply, putting countries like Japan and South Korea under immediate pressure. He says if the situation worsens, the US will also feel the strain, as global market disruptions affect all major consumers.
“This policy reflects preparation for worst-case scenarios and a reassessment of China’s role in the global energy chain,” he adds. “China is not only a buyer, but also a refiner and exporter. At critical moments, we can flex our muscles by limiting fuel exports.”
Export exemptions are prohibited
A Reuters report on Wednesday said Chinese firms are offloading record volumes of LNG, capitalizing on high prices, as domestic supply and pipeline inflows meet weaker demand. This contrasts with Asian buyers trying to replace goods disrupted by Iran-related issues.
As the world’s largest buyer of LNG, China re-exported eight to 10 cargoes in March, a record high, according to ICIS, Kpler and Vortexa. Year-to-date sales total around 1.31 million tonnes across 19 cargoes, mainly to South Korea and Thailand, as well as Japan, India and the Philippines, reinforcing its role as a mobile supplier in Asia.
“NDRC orders refiners to halt exports of gasoline, diesel and jet fuel in March.” writes a Sichuan-based commentator on a military convoy. “But exports have not stopped completely, with countries such as the Philippines and Vietnam still receiving shipments.”
He says the Philippines had less than 10 days of oil until the end of March and declared an energy emergency, so China sent two tankers with more than 260,000 barrels of oil to the country. He adds that China now supplies more than half of the Philippines’ oil imports and is a key pillar of its energy security. In addition, China also sent a tanker of about 100,000 barrels to Vietnam.
“Cutting supply is easy, but the consequences are far-reaching,” he writes. “Disruptions could halt flights, logistics and energy production across the region. By continuing shipments to key partners, China is signaling that while differences remain, it will still meet essential needs, underscoring its influence on regional energy markets.”
He adds that, politically, China’s actions have sent a clear message to neighboring countries that they should rely on in times of crisis.
In an address to the nation on Wednesday, Trump said The US had “destroyed” Iran militarily and economically and called on countries that rely on oil shipments through the Strait of Hormuz to take the lead in protecting the passage.
He said Washington would provide support, but stressed that nations dependent on the route must take primary responsibility for protecting critical energy flows.
Read: China intervenes in Iran breach as investments face fire
Follow Jeff Pao on Twitter at @jeffpao3
