EU's pledge for $250 billion of US energy imports is delusional
Trump and EU Commission President Ursula von der Leyen announced the deal for a 15% tariff on U.S. imports of EU goods at the U.S. leader's golf course in Scotland on Sunday.
But more important than the 15% tariff rate was the apparent commitment by the EU to massively ramp up energy imports from the United States.
The agreement calls for EU imports of U.S. energy, which currently are mainly crude oil and liquefied natural gas (LNG), of $250 billion a year for three years.
This is a delusional level of imports that the EU has virtually no chance of meeting, and one that U.S. producers would also struggle to supply.
Even if the EU did manage somehow to boost its energy imports from the United States to the $250 billion a year mark, it would also prove massively disruptive for energy flows around the rest of the world.
The numbers show the scale of the challenge.
The 28 members of the EU imported 3.38 billion barrels of seaborne crude oil in 2024, according to data compiled by energy analysts Kpler.
Assuming the 2025 volume stays the same and the price paid per barrel averages around $70, this means the EU will pay about $236.6 billion for its crude.
The EU's imports from the United States were 573 million barrels in 2024, which if replicated this year would be valued at around $40.1 billion.
For LNG, the EU imported 82.68 million metric tons in 2024, which would have cost around $51.26 billion assuming an average price of around $12 per million British thermal units (mmBtu).
Imports of the super-chilled fuel from the United States were 35.13 million tons in 2024, worth about $21.78 billion.
The EU also buys coal from the United States, the bulk being higher-value metallurgical coal used to make steel.
Total EU imports of metallurgical coal in 2024 were worth $6.72 billion, assuming an average price of $200 per ton, with those from the United States valued at $2.67 billion.
Putting together the value of EU imports of U.S. crude oil, LNG and metallurgical coal gives a 2024 total of around $64.55 billion.
This is about 26% of the $250 billion the EU is supposed to spend on U.S. energy a year under the framework agreement.
If the EU did ramp up its imports of U.S. crude, LNG and metallurgical coal to $250 billion, it would account for 85% of its total spending on those energy commodities.
The United States exported 1.45 billion barrels of crude in 2024, according to Kpler, which would be worth $101.5 billion at a price of $70 a barrel.
U.S. shipments of LNG were 87.05 million tons in 2024, which would be worth about $54 billion at an average price of $12 per mmBtu.
The U.S. exported 51.53 million tons of metallurgical coal in 2024, worth $10.3 billion at an average price of $200 a ton.
Putting together the value of all three energy commodities gives a total of $165.8 billion, meaning that even if the EU bought the entire volume it would still fall well short of the $250 billion.
The scale of the delusion probably exceeds what Trump and China agreed in their so-called Phase 1 trade deal in December 2019, under which China was supposed to buy $200 billion of additional U.S. energy by the end of 2021.
The reality is that China never even came close to buying that level, and its imports of U.S. energy didn't even reach what they were before Trump launched his first trade war in 2017.
There are a few caveats when looking at the framework agreement between Trump and Von der Leyen.
The first is that not all the details are known and the $250 billion of energy is also said to include nuclear fuel, although this will only be a small value even if included.
The second is the deal will probably include refined fuels, with U.S. exports to the EU of products such as diesel, being almost 110 million barrels in 2024, worth about $10.9 billion assuming a price of $100 a barrel.
But it's still clear that the commitment to buy $250 billion in U.S. energy is completely unrealistic and unachievable.
The smart people in the room must know this, begging the question as to why agree to what is obviously a ridiculous number?
What happens when the inevitable failure is realised?
Perhaps the EU is hoping for the same outcome as China did with the first trade war with Trump in 2019.
Run down the clock, talk nice, and hope the next U.S. president is easier to deal with.
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The views expressed here are those of the author, a columnist for Reuters.
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