Parts of Beijing are on lockdown, following intense restrictions in Shanghai over the last month, as covid cases continue to rise. Instead of containing the virus, China still seeks to eliminate it.
The moves are already shaking up energy markets as demand in China—the world’s top importer of both oil and natural gas—contracts. Prices for both commodities have fallen since the lockdowns began; liquified natural gas in Asia is now half the price it was when Russia invaded Ukraine.
Importers of liquefied natural gas (LNG) in China are now looking to re-sell at least five major shipments, according to Bloomberg. First in line will likely be buyers nearby in Japan and South Korea, also major users of LNG. But falling demand for LNG in China is also good news for Europe, which is desperate for alternatives to Russian gas. Lower prices could offset the cost of shipping LNG from Asia to Europe, and more LNG from the US could become available on the market.
LNG is a keystone of Europe’s plan to reduce its reliance on energy from Russia. Before the war, there were no new LNG import terminals planned on the continent, according to the intelligence firm Rystad Energy; now, there are at least twelve.