Industry Trend Analysis - Scenario Analysis: What Would Trump Energy Policy Mean For Asian Importers? - APR 2017
While not our core view, should Trump's pro-energy policies drive a meaningful upsurge in US crude and LNG exports in the coming years, major energy importers in the Asia-Pacific will benefit from greater opportunities for arbitrage and supply diversification.
Should Trump's policies - through a mix of fiscal and regulatory relaxations - support higher crude oil and gas output in the US, it could push down US prices and increase outflows of these commodities towards APAC.
A rise in US crude exports will benefit China, South Korea and Japan, which will help to cushion the loss in certain OPEC barrels in the short-term, and ease reliance on Middle Eastern crudes in the long-term.
|US Crude Flows Have Further To Rise|
|US Crude Oil Tanker Flows To Asia, DWT|
|Source: Bloomberg, BMI|
Higher gas production would support lower US hub prices and LNG export prices. This will benefit Asia, where we see net LNG imports averaging yearly growth of 6.3% to 2021.
India, Pakistan and Bangladesh have few LNG supply deals in place compared to their projected LNG imports growth over the coming years. US cargoes could help fill some of this gap.
|US LNG Could Gain Market Share In Asia EMs|
|Asia-Pacific - LNG Net Export Forecast, bcm|
|Negative implies imports. f = BMI forecast. Source: National Sources, EIA, BMI.|