U.S. Eases Ethane Export Rules for China

Jun 26, 2025

The United States ( U.S. ) has lifted a restriction on exports of ethane, a petrochemical feedstock, to China, but only under certain conditions, Reuters has reported, citing an unnamed source and a letter sent by the government to the two largest exporters, Energy Transfer, and Enterprise Products.

China is the largest importer of U.S. ethane, produced in abundance thanks to the surge in natural gas output from the shale patch. The country imports about 50% of total U.S. ethane exports, or close to 250,000 barrels daily. This changed after President Trump declared a trade war on Beijing, which quickly progressed to a tariff exchange that eventually spread to petrochemical feedstocks such as ethane and propane.

A few weeks ago, the U.S. Department of Commerce introduced a special licensing regime for exports of ethane, which affected flows, sparking worry among Chinese petrochemical producers that they might not survive because there is no readily available alternative to U.S. ethane. The United States has been virtually the only supplier of ethane to Chinese petrochemical makers since 2018, with volumes growing consistently since then.

The Reuters report says that Commerce has now allowed Energy Transfer and Enterprise Products to load ethane and ship it to China but they cannot unload there without express authorization. It could be taken as a sign that the restrictions may be lifted, avoiding further disruption of the petrochemical industry in the world’s largest producer of plastic. It could also be a sign that the trade war is moving towards a peaceful resolution.

On the other hand, the source who spoke to Reuters said neither Energy Transfer nor Enterprise Products were eager to start loading ethane for China because once they reach their destination, it would be hard to prevent the crew from unloading the cargo, which would put the exporting company at risk of penalties.

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