Despite President Donald Trump’s vow on his first day in office to supercharge American oil and gas production, the U.S. energy sector is now facing an unexpected reversal. Crude prices have collapsed, drilling activity is slowing, and companies are bracing for layoffs—all under the weight of a global supply glut and tariff-induced uncertainty.

Trump, who declared a national energy emergency and urged a “drill, baby, drill” approach to energy independence, had aimed to remove obstacles to domestic production. But within weeks of his inauguration, oil markets were in turmoil. Crude prices tumbled from $78 to near $55 per barrel, pressured by Trump’s sweeping new tariffs and OPEC+’s decision to ramp up supply. Many U.S. firms now say they can’t break even below $65 a barrel, leaving them no choice but to consider scaling back drilling and slashing jobs.

China is beginning to feel the deep strain of its escalating trade war with the United States, despite repeated official claims that the country is prepared to endure prolonged economic pressure. Mounting signs of stress across Chinese manufacturing hubs, a sharp fall in export orders, and widespread production halts now indicate that the costs of the conflict are beginning to bite hard.

The most visible evidence of this came with April’s factory data, which showed the weakest industrial output in more than a year and a plunge in new export orders to levels not seen since the depths of the pandemic in 2022. While Chinese officials continue to insist the country will meet its 5% growth target for 2025, a growing number of small and mid-sized firms are suspending operations, putting employees on leave, or scaling back production due to lost American demand and soaring uncertainty.

China’s plan to list domestic, yuan-denominated LNG futures on the Shanghai Futures Exchange is best understood as an attempt to shift the “control layer” of LNG pricing and risk management closer to home. For years, Chinese buyers have been the largest single source of incremental LNG demand, yet the core hedging benchmarks that shape contract formulas and price expectations sit outside China, anchored in Western or offshore hubs such as Europe’s TTF, U.S. Henry Hub, and Asia’s JKM.

A yuan contract on a major mainland exchange would give Chinese importers a way to manage price swings without defaulting to dollar-based instruments, and it is designed explicitly to create a reason for foreign counterparties with China exposure to trade on Chinese rails as well.