US Vote 2024: Trump 2.0 to reshape global LNG landscape, unlock long-term demand

Triggered by incoming US President Donald Trump, the next four years could prime the liquefied natural gas (LNG) markets for a golden era. Based on his campaign pledge, the returning president’s expected policies are likely to accelerate US LNG infrastructure expansion through deregulation and faster permitting, bolstering global supply. This could strengthen the sentiment around global LNG supply after years of uncertainty, helping to unleash long-term demand. Even so, an untimely supply boost will heighten the risk of a medium-term market glut, which would put downward pressure on prices.

President-elect Trump’s pro-energy agenda includes fast-tracking permits for stalled LNG projects, reversing Biden-era regulatory pauses and increasing leases on federal land for gas production. If implemented, US LNG export capacity could nearly double from 11.3 billion cubic feet per day (Bcfd) in 2023 to 22.4 Bcfd in 2030, with major projects like Texas LNG and Calcasieu Pass (CP2) moving forward despite environmental pressures. This expansion is crucial for the US to remain a major player in the global LNG market, with demand expected to reach almost 600 million tonnes (Mt) in 2030. Based on currently producing and under-development projects, a supply gap of 140 Mt will materialize in 2035.

Trump’s accelerated LNG approvals could further strengthen the US position in the global energy market, meeting critical demand as the world transitions away from other energy sources. However, this rapid expansion risks oversaturating the market, potentially driving down prices and profitability for producers. The key challenge will be balancing domestic growth ambitions with global stability to ensure long-term market share and competitiveness.

The geopolitical implications of expanded US LNG production are also substantial. The Trump administration could leverage LNG as a bargaining chip in trade negotiations with Europe, Russia and other major economies. Europe is still searching for reliable, long-term alternatives to Russian piped gas and LNG supply, while China-US LNG trade is likely to be affected by tariffs.

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Trump’s history of imposing tariffs during his first administration raises concerns about the potential impact on LNG infrastructure costs and trade. A 25% steel tariff implemented in 2018 led to significant price increases for LNG projects, a trend that could repeat under Trump 2.0. Additionally, another trade war with China could disrupt the flow of LNG between the two countries, just as it did in 2019 when LNG exports were halted. Such tariffs would not only elevate capital expenses for LNG projects but also risk slowing contracting activity with key buyers like China, jeopardizing long-term export growth.

While Trump’s policies aim to bolster US energy independence and dominance, the global LNG market is highly sensitive to supply-demand fundamentals. The risk of oversupply looms large, especially if multiple new US LNG projects move forward simultaneously. An oversaturated market could erode prices, disadvantaging US producers compared to competitors like Qatar and Australia. However, reliable US supply would also unlock new demand, particularly from price sensitive markets in Asia, if executed strategically.

Europe stands to be a significant beneficiary of Trump’s LNG expansion policies, particularly as the EU strives to further reduce reliance on Russian gas. European leaders have already hinted at using US LNG purchases as a bargaining tool to avoid potential trade tariffs under Trump’s administration. By aligning energy policies and prioritizing US imports, Europe could secure a stable energy supply while fostering stronger transatlantic relations.

Contacts 
Emily McClain
Vice President, Head of North America Gas & LNG Research
Phone: +1 713 980 3800
emily.mcclain@rystadenergy.com

Jan-Eric Fähnrich
Senior Analyst, Gas & LNG Market Research
Phone: +1 713 980 3800
jan-eric.fahnrich@rystadenergy.com

Elliot Busby
Head of Media & Communications
Phone: +47 40 02 41 94
elliot.busby@rystadenergy.com

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