BREAKINGVIEWS-Europe’s US gas pivot is a work in progress

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Yawen Chen

LONDON, Jan 15 (Reuters Breakingviews) - Donald Trump wants to sell Europe more gas. That sounds doable: the European Union needs more of it. And the trade might discourage the U.S. president-elect from slapping a 10% tariff on European goods which could, per Citi, shave 0.3 percentage points off a euro zone economy only set to grow 0.5% in 2025. Yet an accelerated pivot isn’t guaranteed.

Before the Ukraine war that commenced in 2022, Russia supplied 47% of EU gas, mainly via pipelines but also through liquefied natural gas (LNG). That dwindled to 13% in 2024 as Moscow cut exports and the EU shifted rapidly to renewable energy and other fossil fuel suppliers. But Europe still imports 50 billion cubic metres (bcm) of Russian product, per Bernstein, and Brussels wants this to be zero by 2027.

The EU-U.S. trade is headed in the right direction. In 2022 U.S. President Joe Biden pledged an extra 15 bcm of LNG to Europe, rising to 50 bcm by 2030. At the start of 2025, Ukraine refused to allow one of Moscow’s last remaining gas pipelines to Europe to keep operating, cutting another 15 bcm of annual Russian gas flows. Last year LNG was 29% of Europe’s gas supplies, up from 18% in 2019, and U.S. LNG was half of all LNG imports.

Yet even if Trump reverses a Biden-era export ban on new LNG projects, only 3% more U.S. gas is coming online this year due to infrastructure bottlenecks and delays, Aurora Energy Research estimates. U.S. domestic power demand could soar owing to an artificial intelligence boom, hitting export volumes. A surge in U.S. LNG production from current levels may only happen in 2026, per Aurora.

Meanwhile, Russian gas imports to the EU aren’t declining in a straight line. The bloc has struggled to get member state backing for an outright LNG ban. Instead, Brussels has targeted Russian LNG tankers headed to Asia by stopping cargos changing vessels in European ports – a necessary requirement in winter. But these volumes – around 6 bcm – therefore may stay inside the EU. With European gas prices up 20% since mid-December, Russia has an incentive to sell them to Europeans anyway.

Further Russian gas supplies may head to Europe if Trump brokers a ceasefire between Ukraine and Russia. Moscow would be keen: higher fossil fuel demand from China would not return Russia to pre-war export volumes, a research paper from Warwick Business School found. Pro-Moscow EU states like Bulgaria, or economically troubled ones like Germany, may be tempted.

Given the effort the EU has taken to free itself of Russian exports, a Kremlin gas bonanza remains unlikely. But even without that, the pivot to the U.S. is far from linear.

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CONTEXT NEWS

A group of 10 European Union nations is pushing to toughen sanctions against Russia by introducing further restrictions on natural gas and bolstering the enforcement of a price cap on oil, Bloomberg reported on Jan. 13 citing a document it has seen.

The allies, which include Sweden, Ireland, Poland and the three Baltic nations, want to prohibit imports of pipeline and liquefied natural gas to the bloc to limit the revenues that the Kremlin uses to finance the war in Ukraine.

(Editing by George Hay and Oliver Taslic)

((For previous columns by the author, Reuters customers can click on CHEN/
yawen.chen@thomsonreuters.com))