The U.S. has lifted recent restrictions on ethane exports to China, signaling a positive step in easing trade tensions between the two nations. On Wednesday, the U.S. Commerce Department sent letters to key exporters—including Enterprise Products Partners (NYSE:EPD) and Energy Transfer (NYSE:ET)—removing a license requirement that had temporarily blocked shipments.
The restriction was originally imposed in late May as a response to China slowing rare earth exports, which are essential for U.S. industries such as automotive and electronics. However, last week’s resolution of rare earth trade issues between Washington and Beijing paved the way for the U.S. to reverse course on ethane export limits.
Ethane exports had come to a halt in June, dropping from 257,000 barrels per day in May, according to Kpler data. Roughly half of all U.S. ethane exports typically go to China, where it is used as a cheaper alternative to naphtha in petrochemical manufacturing. The suspension negatively impacted both American shale gas producers and Chinese petrochemical companies.
Last week, the Commerce Department gave limited clearance to firms like Satellite Chemical USA and Vinmar International, allowing ethane to be loaded for China-bound shipments but restricting unloading without further authorization. As of Wednesday, however, full export activity has resumed. Satellite and Vinmar declined to comment.
At least eight ethane vessels stalled on the U.S. Gulf Coast in June are now en route to China. One vessel diverted to India during the restrictions. Industry analyst Samantha Hartke from Vortexa noted that exports are expected to rebound to normal seasonal levels of around 240,000 barrels per day in July.
This development strengthens energy trade ties and helps rebalance U.S. ethane supply with global demand.