APRIL 11, 2025
A liquefied natural gas export facility in Louisiana last month. – Kathleen Flynn/Bloomberg
PARIS, FRANCE — President Trump made an offer to Europe this week. Buy our energy—a lot of our energy—and we can call off the trade war.
In reality, it isn’t so simple. The proposal would require a wholesale reorientation in the way Europe buys energy. And it would tether the region’s energy security to what is seen as an increasingly unreliable partner.
After the European Union offered to slash tariffs to zero with the U.S., Trump said that wasn’t enough. The bloc, he said, should close its trade surplus with the U.S. by buying $350 billion of U.S. energy products. That amount, nearly equal to the value of all the oil and gas the EU imported last year, would make the U.S. the continent’s dominant energy supplier.
“They’re going to have to buy their energy from us, because they need it,” Trump said in the Oval Office.
Trump set off a 90-day clock for the EU to strike a deal after he paused his reciprocal tariffs Wednesday. The bloc is among America’s biggest trading partners, and the EU has already signaled it is willing to increase its purchases of U.S. energy.
Similar promises were part of a deal the EU struck in 2018 during the first Trump administration. The situation is different seven years later.
Norway is one of the main suppliers of natural gas to Europe. – ntb/Reuters
The EU has already increased its purchases of U.S. energy sharply and has little appetite to buy more. The limitations regarding energy indicate that other concessions such as the purchase of agricultural goods and the reduction of nontariff trade barriers including taxes on U.S. tech giants and health and safety regulations that box out American food products might be needed to satisfy Trump.
“The possibility of the EU buying more American energy to get tariff relief is a myth that needs to be debunked,” said Simone Tagliapietra, a senior fellow at Bruegel, a Brussels-based think tank. “It’s a fantasy.”
The bloc imported around $420 billion of oil, natural gas and coal from various countries last year, including a substantial amount from the U.S. To reach Trump’s $350 billion target means the U.S. would replace most of the EU’s other suppliers in Norway, North Africa and the Middle East.
It was unclear where the $350 billion figure came from, because the EU’s goods trade surplus with the U.S. last year was $237 billion; it was $161 billion with services included.
Europe is wary of linking its energy security to a single source after Russia weaponized its natural-gas pipelines to the region in the run-up to its full-scale invasion of Ukraine. The EU’s energy imports now come from a range of different countries including the U.S., none representing more than 20% of total imports of oil or natural gas.
“The important thing for us is to continue to keep our energy supplies diverse,” said Anna-Kaisa Itkonen, spokeswoman for the European Commission, the EU’s executive arm. “We want to avoid overdependence on any single supplier—we’ve learned our lesson too well.”
For natural gas, the EU relies more on producers in its neighborhood than the U.S., which must liquefy gas to be shipped across the ocean in special tankers. The bloc’s biggest gas supplier is Norway, a rock-solid member of the North Atlantic Treaty Organization with a web of pipelines landing in mainland Europe. It also imports from Algeria, a gas-producing giant with three pipelines connecting to the continent and a significant fleet of LNG tankers.
Still, there is room for modest purchases. Europe could replace the liquefied natural gas it still imports from Russia, said Itkonen. That was a modest $7.2 billion last year, or 16% of the EU’s total LNG imports by volume.
The EU is already buying far more U.S. oil and gas than it did before Russia’s full-scale invasion of Ukraine. In 2024, the U.S. supplied around 16% of the EU’s oil imports and 45% of its LNG, making it the biggest source of these imports, according to official EU statistics.
In the short term, Europe needs an even greater injection of energy. A cold winter left its natural-gas storage depleted below average levels. EU rules require countries to fill storage, now around 35% full, to 90% by Dec. 1. The bloc is debating a change to the rules that would give countries 10 percentage points of flexibility from that target.
There are constraints to getting more U.S. energy to Europe quickly. U.S. LNG terminals, where natural gas is supercooled and loaded onto tankers, are currently running at full capacity. And while new capacity is expected to come online next year, European companies have been wary of signing long-term contracts with U.S. suppliers, given the bloc’s goal of sharply reducing its gas consumption to reduce greenhouse-gas emissions.
Europe isn’t a growth market for fossil fuels. Oil-and-gas imports have been falling in recent years, partly driven by the rollout of solar and wind power, but also because of stagnant economic growth and the shutdown of some energy-hungry factories when prices surged in 2022.
The bloc used 20% less natural gas for power generation last year than in 2019, according to a report from the environmental think tank Ember. Solar and wind power accounted for 28% of all electricity generated in the EU last year, compared with 26% from gas and coal combined.
Another obstacle is that the EU can’t force a swift turnaround in imports. Energy purchases in the EU are mostly made by private companies driven by consumer demand and market prices. Many have long-term contracts with suppliers from Norway, Qatar, Algeria, Saudi Arabia and others. Breaking these agreements would incur substantial penalties and lawsuits.
“Companies are free to decide where to buy oil and gas from, and the EU cannot force any joint purchasing here,” Tagliapietra said.
Courtesy/Source: WSJ
