By Ben Cahill
About the author: Ben Cahill is a nonresident fellow at the Arab Gulf states Institute and a regular contributor to Barron's . The views expressed in this publication are solely those of the author.
Happy stories sometimes take an unexpected turn. Over the past decade, U.S. oil and gas exports have bolstered global energy security by adding volume and flexibility to the market. The rise of U.S. liquefied natural gas has played an especially important role in that newfound energy security. But some buyers are beginning to worry about the increased power this gives U.S. presidents.
Energy abundance has enabled many of President Donald Trump's boldest foreign policy moves. It is hard to imagine him bombing Iran's nuclear facilities, capturing Venezuela's president, or sanctioning Russia's largest oil producing companies in a world without ample oil and gas supplies.
Trump seems convinced that he can act without fear of energy-market repercussions. He has a point. Over the past year, the oil market has repeatedly shrugged off geopolitical events that formerly would have sent oil prices soaring. But as the U.S. leverages its position as an energy exporter, buyers of its LNG -- Europeans in particular -- have some concerns.
The latest flashpoint is Greenland. Trump's initial demands for U.S. ownership of the Danish territory set off a fresh round of tariff threats from the White House. Trump backed down from those tariffs on Wednesday, but what he does next is hard to predict.
Trans-Atlantic tensions could threaten a key source of strength for the Europeans. Beginning in 2021, Russia's curtailment of pipeline gas supplies to Europe and its war on Ukraine left buyers scrambling for alternatives. U.S. LNG helped fill the gap. Europe boosted its imports of U.S. LNG by more than 60% last year. In total, the EU now gets more than half of its LNG from the U.S. And it has made commitments to buy even more.
The U.S.-EU trade agreement last year set a target of $250 billion in annual EU purchases of U.S. energy exports over the next few years. That target, which triples U.S. export levels from 2024, will be virtually impossible to meet. Still, the Trump administration now views its energy trade through the lens of this deal.
It argues that several EU regulations act as trade barriers and demands that Brussels eliminate them. Plenty of other countries have criticized the EU's Corporate Sustainability Due Diligence Directive and other onerous climate-related regulation. But EU policymakers worry that dependence on U.S. energy limits their options.
Of course, the U.S. oil and gas industry isn't monolithic. Buyers in Europe and elsewhere appreciate that oil and gas are exported by many companies. Indeed, one of the signature elements of the shale revolution and the rise of U.S. LNG is that the invisible hand of the market has shaped production increases, flows, and commercial deals. This makes the U.S. somewhat unique. The country is an energy superpower without a national champion. Reliance on U.S. LNG is a far cry from Europe's previous dependence on one dominant supplier, Russian state-owned Gazprom.
Still, the fact that the U.S. has emerged as a leading energy exporter has emboldened White House interventions in the energy markets. These include greatly expanded sanctions on Iran, Venezuela, and Russia, and President Joe Biden's releases from the Strategic Petroleum Reserve to tame domestic energy prices in 2022. Trading partners fear that the current administration could apply similar interventions as part of its trade agenda.
The EU will no doubt be reluctant to impose tariffs on U.S. energy supplies, given the concerns of member states over high energy costs and lagging economic competitiveness. But if trade disputes with the U.S., re-escalate, Europe might feel incentivized to rebalance its energy relationships and seek more diverse suppliers. Buyers in Europe and Asia are even contemplating the risk that Trump or a future president could decide to restrict LNG exports.
The free market produced unprecedented growth in U.S. oil and gas production and exports. Countries value energy security and recognize the vital U.S. role in boosting global supply. They are less enthusiastic about exposure to market interventions.
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January 23, 2026 12:38 ET (17:38 GMT)
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