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Citi Predicts Limited Impact on Natural Gas Prices from China's US LNG Tariff

Citi Research anticipates minimal effects on global natural gas prices following China's imposition of a 15% tariff on U.S. LNG imports, effective February 10, 2025. The report suggests that Chinese buyers will likely substitute U.S. LNG with supplies from other countries, a strategy previously employed during the 2019 trade tensions. Despite the tariff, Citi raises its price forecasts for European TTF natural gas to $15.4/MMBtu for Q1 2025, citing higher-than-expected demand due to colder winter temperatures and reduced wind and hydro power generation. Similarly, JKM LNG prices are forecasted to rise to $14.4/MMBtu for Q1 2025, driven by weak Asian demand and potential supply constraints from Indonesia. "We expect limited impacts on price of Asian JKM LNG and European TTF natural gas," Citi analysts note, emphasizing the resilience of global trade flows in the face of geopolitical shifts.