Global Market Analysis

US Energy Exports – Giving The Trump Administration A Lot of Leverage?

November 21, 2024

Companies Mentioned: Dow, Navigator Gas, Ineos, Aramco, Rongsheng, OQ, ExxonMobil, Wanhua, ADNOC, Borouge, Satellite, Equinor, Macquarie, Hess, CNOOC, Air Products, Atlas Copco, Henkel, Celanese, Walmart, Volkswagen, Nvidia, Mercedes, Ford, Evonik, Maersk, Hapag-Lloyd, Target
Commodities Mentioned: Polyethylene, Ethane, Ethylene, Crude Oil, Natural Gas, NGL, LNG, Hydrogen, Biofuels, RNG, Methanol, Biogas, Solar Power

Daily Chemical Reaction

US Energy Exports – Giving The Trump Administration A Lot of Leverage?

Key Findings

General Thoughts: The US runs a significant trade deficit relative to trade surplus positions in China and Europe, putting the US in a good net bargaining position on trade. However, energy and plastics are major exceptions.
Supply Chain/Commodities: We flag Navigator gas efforts to grow its ethylene shipping capabilities and provide views on polymer trade before publishing a thematic report on polyethylene and the importance of global insights.
Energy/Upstream: We discuss growth in US oil, gas, and NGL supplies, whether the benefits will spur the build-out of domestic industry or serve an overseas market build-out, and uncertainty facing crude oil markets in 2025.
Sustainability/Energy Transition: The rush for biofuels is a natural reaction to higher green hydrogen costs, but they are no panacea because there are insufficient inputs. Meanwhile, the DOE is pushing money out of the door.
Downstream/Other Chemicals: New trade policies will create new trade workarounds, with Mexico being a massive beneficiary if the two sides agree on immigration issues. De-minimis import volumes could rise.

Exhibit 1: The US has a lot of leverage in trade negotiations with China and Europe. However, this does not mean that it does not have exposure in the export market, especially in energy and petrochemicals.