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Feb 6 - By Gavin Maguire, Global energy Transition Columnist

Hello Power Up readers! President Donald Trump's tariff threats continue to drive markets and headlines across the world, and markets are now starting to factor in how retaliatory responses may impact U.S. energy product trade flows. Also in today's Power Up: Europe is on the cusp of a battery storage boom, India plans to review its own tariff surcharges, and why Turkey's growing polluting heft may be a sign of things to come...

Tariff threat pushback

Shortly after U.S. tariffs imposed on China took effect on Tuesday, the world's largest energy importer slapped retaliatory tariffs on imports of U.S. crude oil, liquefied natural gas $(LNG)$ and coal, thereby moving the latest U.S. trade bout into the next round.

While the volume of China's purchases of U.S. energy products is relatively modest, whatever trade there has been in crude oil, LNG and coal between the United States and China is now effectively dead, explains Reuters columnist Clyde Russell.

What's more, "China's reaction raises the risk of further moves by the United States, and ratchets up the trade tension between the world's two largest economies."

Analysts assess that China's tariffs have the potential to cause U.S. oil exports to decline in 2025 for the first time since the COVID-19 pandemic, but may be good news for domestic refiners who can process the crude that China may not buy. Arathy Somasekhar in Houston has the details.

The outlook for the U.S. LNG sector has also been clouded by the tariff turmoil, as many planned export projects had China in mind as a major buyer. Preliminary offtake agreements and contract terms may now be called into question, reports Curtis Williams.

That said, there may be good news for U.S. ethane exporters, as China is expected to step up imports of the petrochemical feedstock to battle shrinking profits at home. Siyi Liu and Florence Tan in Singapore dig in here.

Beyond China, other countries have also made early reactions to the new U.S. tariff regime.

Thailand will increase U.S. ethane imports by at least 1 million tons to try to reduce its trade surplus with the United States.

And India is set to review import tariffs on over 30 items including luxury cars and solar cells, potentially leading tohigher imports from the United States.

Essential reading

Europe’s battery storage capacity is expected to grow around five-fold by 2030, bringing with it increasing returns for energy majors, project developers and traders, as the cost of new projects falls. Wind and solar use has grown to make up around a third of Europe's energy mix, but because renewable sources are intermittent, they have also driven demand for batteries to provide backup. Susanna Twidale in London has the lowdown.

Oil major BP is expected to spend up to $25 billion over the lifetime of a project to redevelop four Kirkuk oil and gas fields, a senior Iraqi oil official told Reuters, as Baghdad seeks to win back foreign investment. Here's the full exclusive from Aref Mohammed and Ahmed Rasheed from Baghdad.

Growing tension across Europe's electricity markets has sharpened focus on the region's most dependable and integrated exporter of clean power: France.

East Timor would prefer to work with Australia and partners Woodside Energy and Japan's Osaka Gas over Chinese firms that have expressed interest in developing the stalled Greater Sunrise natural gas field. Sudarshan Varadhan's scoop is here.

The cobalt market is no stranger to boom and bust cycles but the current downturn is unprecedented and no one is sure how long it's going to last. Reuters columnist Andy Home delves in.

Many of Northern Europe's largest economies have sharply boosted gas-fired power generation so far in 2025, helping to lift regional gas prices to their highest since early 2023.

Turkey surpassed Germany as Europe's top polluter from fossil fuel power production for the first time in 2024, marking an important shift in Europe's main polluting hubs away from traditional industrial centers to its fringes.

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(Editing by Marguerita Choy)

((gavin.maguire@thomsonreuters.com))