It's hard to discuss the energy industry's future without considering the tariff standoff between China and the US, as was evident in the S&P Global Platts Energy Forum on Wednesday.

In analyzing macroeconomic indicators and energy demand, Claudio Galimberti, head of demand and refining analytics at S&P Global Platts, said that energy price changes and a stronger dollar would have a smaller impact on consumer energy demand than a slowdown in global growth.

Galimberti considers China and the US to still be in the tariff negotiation stage. If solutions can't be found, and if China and the United States descend into an all-out trade war, it would impact GDP growth negatively, he said.

According to Galimberti's projection, a trade war between the US and China would reduce US GDP by about 1.5 percent in 2019 and 2020, leading the US into a recession.

For China, the projected GDP loss would be about 1 percent and 1.5 percent respectively, causing many problems.

Such a scenario would stop the upward trend for energy demand, he predicted.

S&P Global Platts, an independent provider of information, benchmark prices and analytics for the energy and commodities market, also released a report on liquefied natural gas (LNG) in October to examine the LNG transportation sector.

The analysis suggests that US-China LNG trades, if unaffected by trade disputes, could generate significant ton-mile demand and increase freight rates, while new LNG vessel deliveries from 2018-2020 are likely to be absorbed by growing LNG demand.

The report pointed out that US LNG requires far more shipping resources than its IndoPacific competition to reach the key Asian markets, where China and India are the driving forces of growing LNG demand.

That trend is set to continue as US liquefaction capacity is currently only about one- third of a projected 2020 capacity of more than 55 million metric tons per year.

The report said, however, that the trade dispute has raised some concerns about a contraction in shipping demand, as Chinese buyers realign their purchases of spot US LNG cargoes and replace them with LNG from sources closer to Chinese ports.

The risks were exacerbated by US commitments to make it easier for European countries to buy American LNG by reducing trade barriers, in recent announcements from Washington, the report pointed out.

China has imposed retaliatory tariffs on an additional $60 billion worth of US imports, including a 10 percent tariff on LNG that was effective Sept 24.

"The move has left Chinese buyers scrambling for substitutes and approaching independent trading houses and oil majors for options to divert their US spot cargoes and swap them for non-US LNG ones, which is likely to result in either price premiums for non-US volumes or discounts for US cargoes, especially over the peak winter demand season," the report pointed out.

"With US-China LNG trading threatened by tariffs and the timeline of new FIDs (financial investment decisions) still uncertain, the delicate balance of the sector is anything but certain," the report concludes.

Contact the writer at mayzhou@chinadailyusa.com