Asian Countries Buying US Energy to Ease Tariff Pressure
Synopsis
Asian countries are adjusting their strategies to manage trade imbalances with the United States. A key element of this shift is Asian countries buying US energy, such as oil, gas, and LPG. By expanding…
Asian countries are adjusting their strategies to manage trade imbalances with the United States. A key element of this shift is Asian countries buying US energy, such as oil, gas, and LPG. By expanding their energy imports and striking new agreements, these nations aim to reduce the impact of American tariffs while reinforcing economic ties. The developments in the Asia-US energy trade are highlighted through the actions of Indonesia, Pakistan, India, Thailand, and major US export projects.
Why Are Asian Countries Buying US Energy?
Rising US tariffs under President Trump and large trade surpluses have put pressure on Asian countries to rebalance their trade relations. At the same time, many Asian economies depend on energy imports. Now, the focus is on increasing energy purchases from the US. This approach aims to reduce trade friction and show willingness to cooperate on major economic issues. Many Asian countries run large trade surpluses with the United States and are also major energy importers.
Indonesia’s Plan to Increase US Oil and Gas Imports
Indonesia is preparing to buy more US crude oil and liquefied petroleum gas (LPG). Energy minister Bahlil Lahadalia has signalled plans to raise imports by $10 billion, aiming to help with ongoing tariff negotiations. This includes:
- Lifting the LPG import quota from the US
- Importing more American crude
These steps are central to Indonesia’s target of lowering its trade surplus with Washington.
Pakistan Exploring US Oil for the First Time
Pakistan, another significant energy importer, is looking at bringing in US crude oil as a new strategy. According to a government source and a refinery executive, Pakistan wants to match its current fossil fuel imports by value. That means up to $1 billion of US oil could start flowing into Pakistan to counter the country’s trade imbalance, which led to higher US tariffs in the first place.
India Considering Lower Tax on US LNG
India also faces a persistent trade surplus with the US. Now, the government is discussing the removal of import taxes on US liquefied natural gas (LNG), US ethane, and LPG. Some recent developments include:
- India’s largest LNG importer (GAIL India Ltd) is tendering for up to a 26% stake in a US-based LNG project, alongside a 15-year purchase deal.
- Plans to scrap duties on US LNG and other key fuels to boost imports.
These moves support both energy needs and trade balance efforts.
Thailand Expanding US Energy Contracts
Thailand is taking steps to widen its US energy imports as part of a broader, long-term supply strategy. The government laid out agreements that include:
- Importing over 1 million metric tons per year of US LNG for the next five years, part of a 15-year plan starting in 2026.
- An additional contract for more than 1 million tons of US LNG in the next half decade.
- Plans to purchase 400,000 tons of US ethane over four years, valued at $100 million.
Asian governments from South Korea to Indonesia are rushing to sign up for liquefied natural gas purchases from the US, hoping to reduce trade imbalances and win tariff relief. With these agreements, Thailand aims to secure both energy supply and better standings in the Asia US oil trade.
Big Alaskan LNG Project Targets Japan, South Korea, and Taiwan
Beyond single-country deals, the US is encouraging larger, regional projects in the Asia US oil trade. President Trump has been keen for Japan, South Korea, and Taiwan to take part in the $44 billion Alaska LNG export venture. This project focuses on:
- Transporting natural gas from Alaska’s far north via a 1,300-km pipeline for export to East Asia
- Avoiding bottlenecks like the Panama Canal
- Attracting investment from key Asian trading houses and government agencies
Recent meetings in Japan and ongoing talks in South Korea underline the high level of interest in this project. Taiwan’s state energy firm has already signed on to buy Alaskan LNG, with their president pointing to the deal as a move to guarantee the island’s energy security.
Source
Reuters - Asian countries look to buy more US energy to offset trade imbalance
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