Return to Russian gas? - Trump's tariffs add to Europe's dilemmas
More than three years after Russia invaded Ukraine, Europe’s energy security is fragile. U.S. liquefied natural gas helped fill the gap left by Russian supplies to the Old Continent during the 2012-2013 energy crisis. But now that President Donald Trump has shaken up relations with Europe and is using it in trade negotiations, businesses are aware that reliance on the United States is another weakness.
Executives at big EU firms are starting to mention what would have been unthinkable a year ago: importing Russian gas, even from state-owned Russian giant Gazprom, might be a good idea. That would require another major policy shift, given that Russia’s invasion of Ukraine in 2022 “forced” the European Union to pledge to stop importing Russian energy by 2027.
Europe has limited options. Talks with LNG giant Qatar for more gas have stalled, and despite the expansion of renewables, the pace is not fast enough to provide the security the bloc needs. “If there is a reasonable peace in Ukraine, we could return to flows of 60 billion cubic meters, maybe 70, a year, including LNG,” said a representative of France’s Engie.
The French state partly owns Engie, which was once one of Gazprom’s biggest gas buyers. He said Russia could supply about 20-25% of the EU’s needs, down from the 40% it supplied before the war. Meanwhile, a senior official at French oil giant TotalEnergies has warned Europe against over-reliance on American gas. “We need to diversify our sources, not rely too much on one or two options,” he said.
"Europe will never go back to importing 150 billion cubic meters from Russia like before the war... but I would bet maybe 70 billion cubic meters," the official added. France, which produces large amounts of nuclear power, already has one of the most diverse energy supplies in Europe. Meanwhile, Germany relied heavily on cheap Russian gas to help boost its manufacturing sector until before the war in Ukraine.
US gas covered 16.7% of EU imports last year, behind Norway at 33.6% and Russia at 18.8%. Russia's share will fall below 10% this year after Ukraine shut down pipelines. The remaining flows are mainly LNG from Novatek.
The EU is preparing to buy more American liquefied natural gas as Trump wants Europe to reduce its trade surplus with the United States. But the tariff war has reinforced Europe's concern about its dependence on American gas. "It is becoming increasingly difficult to consider American LNG as a neutral commodity: at a certain point it could become a geopolitical tool," experts point out.
If the trade war escalates, there is a small risk that the United States will curb gas exports, they added. A senior EU diplomat, speaking on condition of anonymity, agreed, saying no one could rule out "this strategy being used" by the Americans.
If domestic U.S. gas prices rise due to growing industrial and artificial intelligence demand, the country could limit exports to all markets. In 2022, the European Union decided to end Russian gas imports by 2027, but has twice delayed releasing plans for how to achieve that goal.
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