On August 27, 2026, China’s state-owned energy company CNOOC announced that there is potential for energy cooperation between the United States and China, and that joint investments with US companies could be considered in the future.[i] This development has brought the position of energy relations between the two countries in the context of strategic competition back into the spotlight. While the announcement does not indicate any agreement or policy change, it is noteworthy because it comes at a time when US-China energy trade has significantly contracted due to tariffs and political tensions. Therefore, CNOOC’s statement is important not so much as a sign of a new energy rapprochement, but rather for examining the forms in which economic ties between the US and China can survive under conditions of strategic competition.
To understand the nature of this relationship, it is first necessary to examine the positions of the US and China in the global energy market. The US is the world’s largest exporter of liquefied natural gas (LNG), with exports reaching 15 billion cubic feet per day in 2025, and the US Energy Information Administration expects this amount to exceed 18.1 billion cubic feet per day in 2027.[ii] China continues to be one of the main centers of global LNG demand. However, in 2024, US-sourced LNG accounted for approximately 5% of China’s total LNG imports, while the Chinese market accounted for a similar portion of American LNG exports.[iii] These ratios make it more meaningful to evaluate the energy relationship between the two countries on the basis of economic complementarity rather than forced interdependence.
This economic complementarity persists through contractual relationships despite the decline in direct energy trade. Since 2018, more than 20 long-term LNG contracts have been signed between Chinese companies and US suppliers, reaching a total volume of approximately 27.1 million tons per year.[iv] However, due to increased tariffs in 2025, direct LNG shipments from the US to China largely ceased; Chinese companies such as Sinopec and CNOOC began redirecting American LNG obtained under contracts to European and other Asian markets.[v] The destination flexibility offered by American LNG contracts allows Chinese companies to maintain their long-term agreements without paying high tariffs. Therefore, in this example, geopolitical competition is not severing energy ties entirely, but rather changing the geography of trade, transforming direct energy trade into a more indirect economic relationship.
CNOOC’s recent statement is not, in this respect, a message of cooperation independent of existing trade relations. The company has a five-year supply agreement with American LNG producer Venture Global covering 0.5 million tons of LNG annually, and during trade tensions, the redirection of cargoes supplied under this contract to third markets has been discussed.[vi] The fact that Beijing continues to impose a 25% tariff on American LNG despite four American LNG ships heading to China following the Trump-Xi meeting on May 14, 2026, shows that political obstacles to direct trade have not yet been removed.[vii] Therefore, CNOOC’s statement that it is open to future investments with US companies can be interpreted not as a new energy rapprochement, but rather as a signal that existing economic channels can be maintained despite political tensions.
However, the continuation of existing commercial ties does not eliminate China’s quest to reduce its dependence on LNG imports. The increase in domestic natural gas production, the expansion of pipeline gas from Russia and renewable energy investments diversify China’s energy supply options. As of July 2026, major energy analysis organizations have reduced China’s LNG demand forecasts in the early 2030s by between 14 and 22 million tons, while the country’s LNG imports in 2026 are expected to decline for the second consecutive year.[viii] In this case, there is a trend in China’s energy policy not only to move away from US-sourced LNG, but also to diversify, which will prevent any foreign supply channel from becoming indispensable. Protecting American LNG contracts does not contradict this strategy; On the contrary, American LNG is no longer a mandatory source for China, but can remain one of the alternative supply options.
A similar flexibility exists on the US side as well. The ability of American LNG producers to redirect exports to Europe and other Asian markets during periods of declining direct sales to China demonstrates that the US is not entirely dependent on the Chinese market. Nevertheless, long-term purchase agreements with Chinese companies remain important, particularly in terms of financing new American LNG projects and final investment decisions. The fact that Chinese companies hold long-term American LNG contracts exceeding 20 million tons/year shows that trade tensions can affect not only current export flows but also the economic conditions of future LNG investments.[ix] Thus, the ability of the parties to limit their interdependence does not completely eliminate the economic justification for energy cooperation.
In conclusion, CNOOC’s emphasis on the potential for energy cooperation with the US demonstrates that strategic competition between Washington and Beijing has not linearly eliminated economic ties in the energy sector. However, it cannot be said that these ties continue in their previous form. While tariffs restrict direct trade, long-term contracts allow energy flows to be redirected to third markets; China is expanding its options with domestic production, Russian pipeline gas, and renewable resources, while the US is developing alternative markets for LNG exports. In this respect, the fundamental trend in US-China energy relations is not a break, but rather the emergence of a more selective and flexible relationship structure where dependence is reduced, but economic options remain open.
[i] “Chinese state oil giant CNOOC sees potential for US-China energy cooperation”, Reuters, https://www.reuters.com/business/energy/chinese-state-oil-giant-cnooc-sees-potential-us-china-energy-cooperation-2026-08-27/, (Date of Access: 27.08.2026).
[ii] “Ten years after first Sabine Pass cargo, U.S. LNG exports are still on the rise”, U.S. Energy Information Administration, https://www.eia.gov/todayinenergy/detail.php?id=67224, (Date of Access: 29.08.2026).
[iii] Jane Nakano, “U.S.-China Trade War and the Future of U.S. LNG”, CSIS, https://www.csis.org/analysis/us-china-trade-war-and-future-us-lng, (Date of Access: 29.08.2026).
[iv] Ibid.
[v] “Chinese LNG buyers resell US cargoes as tariffs bite”, Reuters, https://www.reuters.com/business/energy/chinese-lng-buyers-resell-us-cargoes-tariffs-bite-2025-04-08/, (Date of Access: 29.08.2026).
[vi] Ibid.
[vii] “Four US LNG vessels sailing to China after Trump-Xi summit”, Reuters, https://www.reuters.com/business/energy/four-us-lng-vessels-sailing-china-after-trump-xi-summit-2026-05-19/, (Date of Access: 29.08.2026).
[viii] “China’s shifting energy mix weakens pillar of global LNG growth”, Reuters, https://www.reuters.com/business/energy/chinas-shifting-energy-mix-weakens-pillar-global-lng-growth-2026-07-30/, (Date of Access: 29.08.2026).
[ix] “Trade war with China casts dark cloud over new US LNG projects”, Reuters, https://www.reuters.com/business/energy/trade-war-with-china-casts-dark-cloud-over-new-us-lng-projects-2025-02-04/, (Date of Access: 29.08.2026).
