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- Current situation: The United States wants to occupy up to 70% of the European energy market
Current situation: The United States wants to occupy up to 70% of the European energy market
The United States intends to occupy an overwhelming share of the European energy market. According to the framework agreement between the United States and the European Union, the total cost of their supplies to the EU will amount to $750 billion over the next three years. Thus, the volume of American imports in the European energy mix may reach 67.5%. At the same time, the European Union should completely abandon Russian supplies. Experts believe that bringing the cost of supplies to $250 billion per year is possible only under one condition — a sharp increase in the cost of American energy resources for European consumers. In the case of oil, it is at least up to $120 per barrel. But in the medium term, this agreement may have the opposite effect for America. The Russian budget is unlikely to suffer from this.
What have the US and EU agreed on?
The negotiations between the American leader Donald Trump and the head of the European Commission Ursula von der Leyen in Scotland resulted in the conclusion of a framework trade agreement. According to the agreements, European goods supplied to the United States will be subject to a 15% duty instead of a 30% duty, as previously promised. In exchange for tariff cuts, the EU agreed to duty-free imports of goods from the United States, increased investment in the country to $600 billion, as well as guarantees of demand for military equipment and energy.
As for the latter, Europe has promised to abandon Russian oil and gas supplies and annually purchase $250 billion worth of energy from the United States during the three years of Donald Trump's rule. The head of the European Commission, Ursula von der Leyen, told reporters in Glasgow about this. She stated that the EU "no longer wants Russian resources," noting that American LNG is "much better."
According to her, the block's estimates are based on the existing plan to abandon the supply of Russian fossil fuels and purchase "more affordable and high-quality" liquefied natural gas from American producers.
So far, the agreement is of a framework nature. The European Commission did not comment to Izvestia on when the text of the document will be published and whether it will be approved by the Council of Europe.
According to Eurostat, in 2024, the EU purchased around €370 billion worth of energy resources worldwide. American shipments totaled about €68 billion (about $79 billion)— or 18%. The US share in LNG imports to the EU reached 45.3% (€18.8 billion), while oil and petroleum products accounted for 16.1% (€42 billion). Thus, the United States intends to increase its share in energy imports from 18 to 67.5%, Izvestia estimates.
Tamara Safonova, Director General of the Independent Analytical Agency for the Oil and Gas Sector (NAANS-MEDIA), recalled that last year Europe became the largest oil import region, purchasing 463 million tons, which is 21% of the world's imported cargo flows of this raw material. In addition, according to her, the supply of petroleum products amounted to 218 million tons, or 17% of the global total. At the same time, Europe reduced LNG imports by 35 billion cubic meters from 168 billion cubic meters. in 2023 , up to 133 billion cubic meters . m in 2024. Exports from the United States also decreased, from 76 billion cubic meters. in 2023 , up to 61 billion cubic meters . m in 2024.
The expert stressed that the United States, which announces the country as the largest net exporter of oil, nevertheless buys significant amounts of oil, primarily from Canada. Total oil imports in 2024 amounted to 329 million tons with exports of 198 million tons.
— Gas consumption in the EU over the past three years has followed a decrease in Russian imports and is provided by shutting down energy-intensive enterprises and saving energy consumption by the population. Against the background of the US trade wars, a new stage of transformation of supply chains is being observed in exchange for artificially fabricated customs duties. The countries that have already agreed, being under the pressure of the recession, nevertheless invest in the American economy," Tamara Safonova notes.
What will the agreement mean for the United States
According to Valery Andrianov, an associate professor at the Financial University under the Government, it will be difficult to implement a plan to purchase energy resources from the United States in the amount of $250 billion per year with prices unchanged.
— This is extremely unlikely, since such a rapid growth in oil and gas production and exports from the United States is impossible. So, according to forecasts of the US Energy Information Administration (EIA), this year oil production in America will grow by only 400 thousand barrels per day to 13.61 million, and in 2026 it will reach 13.76 million barrels. It's not much. Such dynamics will definitely not be enough to multiply, in price terms, the increase in energy supplies to Europe," the expert believes.
According to him, the situation is similar with gas. By the end of 2024, its production in the United States decreased by 0.3%, and for the period 2014-2024, the average annual growth rate was 3.9%. This is also clearly not enough to dramatically increase the export of natural fuels to Europe. The United States already provides 45% of gas supplies to Europe, and a number of new projects for the construction of LNG terminals in the United States are under implementation, but they are not able to completely replace other sources of supply.
— Bringing the cost of supplies to $250 billion per year is possible only under one condition — a sharp increase in prices for American energy resources for European consumers. In the case of oil, it is at least up to $120 per barrel. This is exactly what the Trump administration is trying to achieve — to put the European economy on extremely expensive energy resources in order to get rid of a dangerous competitor once and for all. Coupled with high tariffs for European goods, this should completely deprive the Old World of the remnants of competitiveness and consolidate its role as a satellite of Washington, the expert believes.
Alexey Grivach, Deputy Director General of the National Energy Security Fund, believes that the US—EU agreement is just PR.
— In his last term as president, Trump negotiated about the same thing with China. After the tariff war in 2018, Washington and Beijing announced strengthening trade cooperation in the energy sector, including the Americans announcing that Chinese companies would participate in the construction of an LNG plant in Alaska. But where is this factory now? Meanwhile, China has reduced energy purchases from the United States to almost zero, the expert recalls.
According to Sergey Tereshkin, CEO of Open Oil Market, the EU does not have any tools to force private companies to purchase gas from certain suppliers. At the same time, we should not expect a serious increase in demand in Europe, including due to the development of low-carbon energy. The total share of nuclear power plants and renewable energy sources in the EU's electricity generation structure has increased from 51% in 2010 to 71% in 2024, and this share will increase regardless of the availability of fossil fuels, the expert recalled.
All these tariff wars and agreements with countries can have the opposite effect for the United States, says Ekaterina Kosareva, managing partner of VMT Consult.
— Instability of decision-making and, in fact, economic blackmail should have an impact on European countries as well. I do not rule out that in the future the EU will abandon such an unstable and rude partner, but not tomorrow, but in the medium term," the expert believes.
How will the abandonment of Russian oil and gas affect the Russian economy
As for the impact of the US-EU deal on Russia, according to industry experts, Moscow has long been preparing to close the European market for domestic oil and gas.
Natalia Milchakova, a leading analyst at Freedom Finance Global, recalled that the abandonment of Russian oil and gas would have virtually no impact on the country's budget revenues. Until 2022, Russia supplied 160 billion cubic meters of pipeline gas to Europe, and now only 16 billion cubic meters. According to the analytical company Rystad Energy, 17.8 million tons of LNG were also delivered by the end of 2024.
According to Ekaterina Kosareva, today the main buyers of Russian oil are China and India, where the vast majority of raw materials go.
"Russia, and above all Gazprom, have recouped all the consequences of the loss of the European market since the company's 2023 financial statements were released," Natalia Milchakova recalled, adding that then Russia was able to quickly redirect its hydrocarbon exports to other markets.
The Ministry of Finance of the Russian Federation previously cited calculations according to which Russia lost about a quarter of oil and gas budget revenues due to the EU oil embargo and the shutdown of Russian gas pipelines to Europe, but after 2026 it may be a matter of reducing budget revenues by no more than 1-3%, the expert noted.
Currently, pipeline gas goes to EU countries only through one of the branches of the Turkish Stream, said Sergey Kaufman, an analyst at Finam. The main part of these volumes is about 10-11 billion cubic meters. m per year — goes to Slovakia and Hungary. So far, these countries are actively defending their right to continue importing Russian gas, and it is likely that they will receive an exception to the ban on the supply of this resource.
— Against this background, in the baseline scenario, the potential for a decrease in Russian pipeline exports to the EU is estimated at 2-3 billion cubic meters. The money that goes to EU countries outside Slovakia and Hungary," he said.
According to the adjusted plan, Russia will receive only 8.3 trillion rubles of oil and gas revenues in 2025, compared with 11.1 trillion rubles in 2024. But this will not be due to a reduction in supplies to the EU, which are already at a minimum level, but to lower prices for hydrocarbons this year compared to 2024, Natalia Milchakova summed up.
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