The European Union’s dependence on liquefied natural gas from the United States is set to rise significantly, reaching 80% of all LNG imports in two years, the Institute for Energy Economics and Financial Analysis has warned.
In a report cited by Reuters, IEEFA noted that the European Union already imports significant volumes of U.S. liquefied gas, creating a potentially risky dependence on a single supplier. LNG imports from the United States into the EU accounted for 58% of overall LNG imports. Yet this dependence is only going to increase in the coming years, the outlet said, recommending more wind, solar, and heat pumps as an alternative.
This year, the United States will become the European Union’s biggest supplier of liquefied gas, even as the bloc also gobbles up every ton of Russian LNG it can buy ahead of the 2027 ban on Russian energy imports. The motivation for that ban, in addition to punishment for the war in Ukraine, has been to avoid overwhelming dependence on a single energy supplier, which is what the EU is currently doing with the U.S.
Energy commodities are a big part of the trade deal signed last year by President Trump and European Commission President Ursula von der Leyen. The deal featured a commitment on the part of the EU to buy $750 billion worth of U.S. energy commodities over a period of three years. The European Parliament earlier this year signaled it has problems with the deal, which angered the U.S. president, and he threatened to hike tariffs on EU goods unless the bloc signs the deal as is.
The arrangement elevated American LNG, oil, and refined fuels in Europe’s energy supply mix. The actual supply of so many energy commodities, however, would be physically – and financially – challenging both for the suppliers and the buyers.
By Irina Slav for Oilprice.com
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