The EU, seeking to phase out its dependence on Russian gas, committed to buying $250 billion annually in U.S. LNG as part of the framework trade agreement unveiled on Sunday.
The U.S. became the world’s biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
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The agreement imposes a 15% U.S. import tariff on most EU goods, a softer blow than markets had feared.
“Terms of the EU-U.S. trade deal were at the forefront, with the 15% tariff level better than feared (30% was mooted previously),” said Ashley Kelty, an analyst at Panmure Liberum.
“This should see less of a drag on industrial activity between the two.”
Still, Kelty noted the deal could weigh on gas prices.
“The demand for the EU to buy more U.S. energy will see more U.S. LNG imports in the future,” Kelty said, signalling a potential supply glut.
Shares of U.S. natural gas producers Expand Energy and EQT Corp were up 1.6% and 3%, respectively, before the bell.
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