The European Union is planning to slash natural gas purchase targets — even as U.S. President Donald Trump insists that buying more gas is the only way to end his trade war.
On Tuesday, EU countries advanced plans to loosen mandatory goals for refilling storage facilities ahead of winter — a bid to pay less for supplies, four diplomats told POLITICO.
The move flouted White House demands that the EU spend a colossal $350 billion more on American gas to address a perceived transatlantic trade imbalance. But Trump has issued the dictate before, only to essentially ignore European overtures toward a deal and impose tariffs anyway. Those tariffs are now exacerbating the economic anxiety driving Europe to explore energy cost savings.
Seven countries — France, Germany, Italy, Austria, Hungary, Slovakia and the Netherlands — led the charge to rein in gas purchase goals, advocating lowering a 90-percent-of-capacity storage target to 80 percent in certain circumstances. They say the higher figure is locking the EU into buying huge volumes of gas, much of it from the U.S., at a time when it is most expensive.
Europe turned increasingly to American LNG three years ago when Russia invaded Ukraine and slashed gas supplies to the continent. The U.S. gas has since become a lifeline for the bloc.
That link is only expected to grow stronger in the coming months. The EU is trying to phase out remaining Russian energy ties and also needs to replace gas that, until recently, arrived via Ukraine.
At the current refilling rate, Kpler data shows EU stores are likely to reach only 78 percent of capacity by this winter. To reach 90 percent the EU would have to overpay for gas in the coming months, Page said.
Trump’s tariffs are also prompting predictions of industrial decline, with EU exporters facing a 20 percent levy on all goods they ship across the Atlantic.
Trump’s $350 billion energy purchase demand, issued late Monday, also goes far beyond a realistic negotiating stance. Buying that much in gas would translate to almost 16 million barrels a day — higher than America’s current total daily output of around 13 million barrels.
Posted by John3262005