US analysts believe that liquefied natural gas (LNG) is the simplest and quickest solution in the current situation. The US agency Bloomberg explains that a series of global tariffs introduced last week caused Asian economies to tremble under the worst economic downturn in recent history. As governments try to alleviate the pain, LNG is a natural option as it is one of the few US exports that Asian countries can easily increase their imports of. The US is the world’s largest supplier of this fuel and heating commodity and its exports are expected to double by the end of the decade.
According to the Bloomberg report, Indonesia and Thailand have already agreed to buy more LNG from the US. Indonesian President Prabowo Subianto has also announced that he wants to increase imports of US goods in general, not just LNG. Donald Trump is also reported to have discussed “massive” purchases of US LNG with South Korea’s interim president Han Duck-soo. South Korea is also planning to invest $44 billion in an Alaska LNG project with Japan and Taiwan. Indian LNG importers are also pushing for the elimination of tariffs on US gas supplies. Bloomberg reports that Indian LNG importers have called for the elimination of a 2.5% tariff on US gas supplies, according to sources familiar with the matter. However, the price remains a problem. Gail India Ltd., which has a long-term contract to import 5.8 million tons of US LNG per year, is currently selling most of the quantities in offshore swap transactions due to the high cost of bringing it back home.
The only exception to this buying frenzy is China, the largest LNG buyer in Asia. The country is not succumbing to the US pressure and has instead retaliated by selling contracted US LNG supplies to Europe and other Asian countries. The EU was not spared from the changes in the US oil and gas sector either, as President Donald Trump announced that the US could delay imposing import tariffs on the EU if it starts purchasing US oil and gas in a certain amount, estimated at around $350 billion.