Is EU Spending $250B-per-year Spending on US Energy Realistic?
Analysts question feasibility as framework trade deal outpaces current U.S. export capacity
The European Union’s commitment to purchase $250 billion in U.S. energy supplies annually under a new trade framework with Washington faces significant market challenges, according to analysts and industry observers.
The agreement, announced Sunday, includes 15% U.S. tariffs on most EU goods and a pledge by the EU to dramatically scale up imports of U.S. oil, liquefied natural gas (LNG), and nuclear technology for the next three years.
But experts say the plan far exceeds current market realities.
Scaling Beyond Market Limits
Total U.S. energy exports worldwide reached $318 billion in 2024, U.S. Energy Information Administration data shows. Of that, EU member states imported just $76 billion in petroleum, LNG, and solid fuels last year, according to Eurostat and Reuters’ calculations.
“Meeting this target would require a fundamental redirection of U.S. energy flows,” said Arturo Regalado, senior LNG analyst at Kpler. “Either U.S. oil exports shift almost entirely to the EU, or LNG import values from the U.S. increase sixfold. It exceeds market realities.”
Global Competition for U.S. Energy
The EU is not alone in its push to secure American energy. Japan last week announced a “major expansion” of U.S. energy imports, and South Korea has expressed interest in purchasing fuel from an Alaskan LNG project as part of its own trade negotiations.
This competition could drive higher benchmark oil and gas prices and potentially incentivize U.S. producers to prioritize exports over domestic supply—posing political and economic challenges for both Washington and Brussels.
Infrastructure & Commercial Hurdles
EU officials insist the $250 billion figure reflects a realistic assessment of what the bloc can absorb, provided there are new investments in U.S. production capacity, European import terminals, and shipping infrastructure.
“These figures are not taken out of thin air,” a senior EU official said, emphasizing that additional investment would be needed.
But analysts warn that the European Commission cannot directly enforce purchases, as most oil and gas procurement decisions are made by private companies. The Commission can aggregate LNG demand to negotiate terms, but it cannot compel companies to buy.
“It’s just unrealistic,” said ICIS analysts Andreas Schröder and Ajay Parmar. “Either Europe pays a super-high, non-market price for U.S. LNG or takes volumes far beyond its current handling capacity.”
LNG Expansion & U.S. Supply Constraints
The U.S. is already Europe’s largest supplier of LNG (44%) and oil (15.4%), according to EU data. But raising imports to meet the pledged target would require a substantial expansion of U.S. LNG capacity—well beyond projects planned through 2030, said Jacob Mandel, research lead at Aurora Energy Research.
“Even with additional projects, the scale needed to reach $250 billion annually isn’t feasible,” Mandel said. He estimated the EU could realistically add $50 billion more in U.S. LNG purchases annually as supply increases.
Russian Energy Replacement vs. Declining Demand
The push for greater U.S. energy imports comes as the EU accelerates plans to end Russian oil and gas imports by 2028. In 2024, the bloc imported 94 million barrels of Russian oil and 52 bcm of Russian gas and LNG, compared to 45 bcm of U.S. LNG.
Still, analysts note that European oil demand has already peaked, and broader decarbonization policies are expected to drive fossil fuel consumption lower in the coming years.
“There’s no major need for the EU to import significantly more oil from the U.S.,” Schröder and Parmar added.
(Reuters)
