The Impact of LNG Shipping Cost Fluctuations on China’s Economy under Geopolitics

DOI

10.2991/978-94-6239-701-9_21How to use a DOI?

Keywords

LNG shipping costs; geopolitical risk; GTAP model; international trade; energy security

Abstract

Geopolitical risks are reshaping global LNG shipping costs by disrupting energy supply and transit routes, posing significant challenges to China’s economy, which heavily relies on LNG imports. This study develops a unified quantitative framework linking geopolitical risks, LNG shipping costs, and macroeconomic impacts. By incorporating supply-side shocks and transit-route disruptions into a CGE model, the study evaluates how fluctuations in LNG shipping costs affect China’s macroeconomic performance and LNG import volumes under multiple scenarios. The results yield two main findings. First, Iran’s entry into the global LNG market generates only limited positive effects on China’s economy. By 2030, China’s real GDP increases by only 0.026%. However, when transportation through both the Strait of Hormuz and the Indonesian straits is disrupted simultaneously, China’s real GDP declines by 0.812%, indicating that the negative effects of transport disruptions outweigh the benefits of expanded supply. Second, global LNG trade patterns shift significantly. Iran gains the largest economic benefits, while traditional exporters such as Australia experience economic contraction. The United States and Russia, benefiting from geographic advantages, achieve positive economic growth under most maritime chokepoint disruption scenarios.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Shuyao Lv
PY  - 2026
DA  - 2026/07/30
TI  - The Impact of LNG Shipping Cost Fluctuations on China’s Economy under Geopolitics
BT  - Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026)
PB  - Atlantis Press
SP  - 198
EP  - 205
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-701-9_21
DO  - 10.2991/978-94-6239-701-9_21
ID  - Lv2026
ER  -