Trump wants China to buy a lot more US energy. Analysts doubt he’ll get his way

SINGAPORE - US President Donald Trump is expected to push China to commit to buying more American oil and gas when he meets Chinese President Xi Jinping at a planned summit in Beijing in mid-May.

But while there could be some short-term concessions, given the current energy crisis, Mr Trump’s “energy dominance” agenda will face stiff resistance from Beijing, say analysts. This is because China is prioritising energy independence and views the United States as an unreliable trading partner.

On the face of it, the global fuel supply crunch sparked by the war in Iran presents an opening for an energy deal that can benefit both sides.

Roughly half of China’s crude oil imports and nearly a third of its liquefied natural gas (LNG) imports come from the Middle East. These have been severely disrupted by the Iran and US blockades of the Strait of Hormuz as well as the damage caused to major Gulf refineries like Qatar’s Ras Laffan Industrial City, which accounts for a fifth of the world’s LNG supply.

The US – the largest oil and gas producer in the world – has thus become an attractive option for Chinese buyers seeking alternatives.

For Mr Trump, selling more oil and gas to China will suit his aim of reducing America’s trade deficit with China and pivoting Beijing away from US adversaries like Russia. It is also in line with the US leader’s energy agenda, which is centred on the production and export of fossil fuels as a means of gaining a strategic advantage.

But while some analysts expect that China may agree to buy US energy in the short term, simmering mistrust between the two superpowers precludes any major breakthroughs in an energy relationship marked by strategic competition.

“Energy may come up in discussions about Iran, with Mr Trump likely to ask Mr Xi to help open the Strait of Hormuz and to refrain from buying Iranian oil,” said Dr Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University.

“Mr Trump may ask Mr Xi to purchase US oil instead, which would further Mr Trump’s interest to have Chinese commitments to buy more big-ticket items such as energy, agricultural projects and Boeing aircraft.”

She added: “In the longer term, the conflict in the Middle East is likely to strengthen China’s resolve to increase its energy independence through greater use of domestic resources, especially non-fossil energy.”

Dr Downs, who focuses on Chinese energy markets and geopolitics, said LNG had looked like a bright spot in the US-China energy relationship at the beginning of the decade.

In January 2020, during Mr Trump’s first term, the US and China signed a trade deal in which China pledged to buy more than US$50 billion (S$63 billion) of US energy products, including LNG, crude oil and coal, over two years. However, actual purchases amounted to only about a third of what was promised owing to the Covid-19 pandemic.

Between 2021 and 2023, under the administration of then President Joe Biden, Chinese firms also signed a slew of mostly long-term LNG supply contracts with US-based exporters, with many of these contracts slated to start between 2025 and 2028.

Mr Trump’s second trade war in 2025 caused much of the US-China energy trade to evaporate, as China imposed retaliatory tariffs and halted imports of US gas and crude, although Chinese firms have continued to buy US LNG to resell to other markets such as Europe.

The war in Iran, however, has led to a shift in the dynamics ahead of Mr Trump’s highly anticipated meeting with Mr Xi, which is scheduled for May 14 and 15.

While China has been cushioned by its vast fuel stockpiles and heavy investments in renewable energy, it has not been immune to the supply shock and soaring prices.

In April, China reportedly resumed purchases of US crude oil in response to the disruption of exports through the Hormuz.

China, which has been dependent on the US for ethane – a natural gas component used to create plastics and essential industrial chemicals – has also increased purchases of the material, with imports surging in April as Chinese buyers look to offset losses of other petrochemical feedstocks from the Persian Gulf.

Still, analysts said Beijing is expected to remain cautious about establishing any long-term dependency on American energy supplies.

Noting that shifting to US crude oil would require a reconfiguration of China’s domestic refineries, Mr Victor Gao, chairman of the China Energy Security Institute think-tank, emphasised the need for commercial transactions to be de-politicised.

“Energy trading requires certainty and predictability; it is about ensuring highly predictable transactions,” he told The Straits Times.

“The US has now become the greatest source of uncertainty and unpredictability, so in dealing with Americans, one must be cautious whether you are buying a needle or a barrel of oil,” said the Chinese analyst.

Dr Chad Bown, a trade expert at the Peterson Institute for International Economics in Washington, said China is unlikely to put itself in a vulnerable position where it is dependent on a rival for its energy imports.

He noted, however, that the underlying conditions in energy markets have changed since the last US-China energy trade deal in 2020.

“Because of the war in Iran and the closing of the Strait of Hormuz, there is a global energy shortage today and thus, plenty of suitors for US oil, LNG and refined energy exports,” he said.

But the US is also facing its own domestic complications that could limit Mr Trump’s energy leverage, in particular, the high prices of petrol throughout the country, which could impact the November midterm elections.

The Trump administration is “beginning to worry about too many US exports of energy products to the world”, said Dr Bown, as record-low inventories and peak summer demand mean pump prices could remain high.

Still, with Mr Trump keen to have the Chinese buy US energy, offering to buy US LNG could be a point of leverage for Mr Xi at the upcoming summit, said Mr Daniel Fu, a research associate at Harvard Business School.

“I think you will really see an effort on both sides to reach some kind of an agreement. President Trump certainly needs a victory at this point in time,” he said.