Iran war deepens China’s dependence on US for niche gas
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Shipments of US ethane are expected to rise to an all-time high of 800,000 tonnes in April, which would be around 60 per cent higher than the monthly average..
PHOTO: REUTERS
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BEIJING - China is set to import a record volume of US ethane in April as petrochemical producers seek alternative feedstocks for their operations after the war in the Middle East choked off crucial supplies.
Shipments of US ethane are expected to rise to an all-time high of 800,000 tonnes in April, according to Chinese consultant JLC, which would be around 60 per cent higher than the monthly average. Some companies can switch to using ethane, helping them offset disruptions to the supply of naphtha and liquefied petroleum gas (LPG) from the Middle East after the effective closure of the Strait of Hormuz.
Ethane is a natural gas liquid primarily used to produce ethylene, a building block for plastics, and China depends almost entirely on the United States for supply. The product became a political flashpoint between Beijing and Washington in 2025 after the US tightened export controls during a bitter trade war.
US ethane has become the preferred alternative for China’s ethylene makers due to stable supply and lower cost, said JLC analyst Shi Linlin. Profits to produce ethylene from ethane were tenfold that of naphtha as of April 15, which has been inflated by crude-linked pricing, JLC said.
A ramp-up of downstream production capacity has also lead to a pick-up in demand for the gas. A new ethane unit developed by Wanhua Chemical Group and a multi-feed cracker unit by Sinopec Ineos (Tianjin) Petrochemical, have both supported higher imports in 2026, Ms Shi added.
In February, more than 50 per cent of China’s naphtha imports and over 40 per cent of its LPG purchases originated from Persian Gulf nations, according to Chinese government data. The war started at the end of that month.
The International Energy Agency said last week that “petrochemical feedstocks display the most immediate effects of the war by far”, and that supply chains to Asia have been thrown into “disarray.” Japan has been forced to scramble for naphtha, tapping a range of suppliers including from the US and Africa.
China’s ethane-buying spree comes ahead of US President Donald Trump’s planned visit to Beijing in mid‑May, and US energy is expected to be part of the agenda. It could feature prominently if the Iran war continues to drag on. BLOOMBERG
