The Trump Administration has rescinded licensing requirements for U.S. exporters of ethane to China, paving the way to restoring the trade that was upended by the tariff row with Beijing.
The U.S. Department of Commerce’s Bureau of Industry and Security rescinded on July 2 the license requirements set forth in a previous regulation from June 3, ethane producer and exporter Energy Transfer said in an SEC filing.
Last month, the U.S. federal government asked Energy Transfer and Enterprise Products Partners to secure a license in order to continue exporting ethane to China.
All U.S. ethane exports to China come from two terminals on the U.S. Gulf Coast. Enterprise operates a terminal in Morgan’s Point, Texas, and Energy Transfer operates a terminal in Nederland, Texas.
The U.S. firms were required to submit an application for a validated license prior to the export, re-export, or transfer (in-country) of any ethane or butane products when a party to the transaction is located in China, or is a Chinese “military end user,” wherever located, except for certain eligible license exceptions.
China is a major market for U.S. ethane, a natural gas liquid extracted from wet natural gas during processing and is primarily used to produce ethylene.
The trade war with China in the past months has seen ethane and propane trade between the United States and China suffer significant disruption.
The lifting of the license requirement is set to restart U.S. ethane exports to China in a win for American producers and for the tentative trade deal between the world’s two largest economies.
China is the largest destination for U.S. ethane exports, accounting for 47% of U.S. ethane exports in 2024, per EIA data.
In the June Short-Term Energy Outlook (STEO), the EIA expected U.S. ethane exports to drop this year and next due to the licensing requirements for U.S. exports of ethane to China.
However, the rescinded licensing requirements would now lead the EIA to increase its forecasts for U.S. ethane exports again.
By Tsvetana Paraskova for Oilprice.com
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