US Resumes Ethane Exports to China 240000 Barrels Per Day Back on Track

The United States has lifted restrictions on ethane exports to China, reinstating a critical trade flow that had been halted since June. Letters sent on Wednesday to Enterprise Products Partners, Energy Transfer, and other exporters rescinded a license requirement imposed in May, marking progress in the U.S.-China trade truce.

Ethane shipments, which plummeted from 257,000 barrels per day in May, are now expected to rebound to 240,000 barrels per day in July, according to Vortexa analyst Samantha Hartke. About half of all U.S. ethane exports head to China, making the restriction removal a significant relief for both U.S. shale gas producers and Chinese petrochemical manufacturers.

The restrictions were initially enforced after the U.S. accused China of slowing rare earth shipments vital to industries like automaking. However, this week’s move follows a resolution between the two countries regarding rare earth minerals and magnets, signaling a positive turn in trade negotiations.

The freeze in June had stranded at least eight ethane-loaded vessels along the U.S. Gulf Coast, while one ship even diverted to India to find alternative markets. Wednesday’s decision allows these vessels to resume their journey to China, normalizing trade flows.

Ethane, a key petrochemical feedstock, is preferred by Chinese manufacturers due to its lower cost compared to naphtha. U.S. producers rely heavily on China as a buyer, given the oversupply of natural gas liquids domestically.

The U.S. Department of Commerce and the White House have yet to comment on this development. Meanwhile, analysts expect the resumption of shipments to help stabilize the international petrochemical market, which had faced disruptions during the trade pause.