Bloomberg: Europe is becoming a little too addicted to American gas

Once upon a time, Europe was so smug about its energy security that it mulled banning imports of US natural gas. The continent is today buying a great deal of US gas, prompting a vital question with energy, economic and diplomatic consequences for the European Union: When does a lot become too much?

Without access to Russian pipelines since 2022 and with domestic production declining fast — for both political and geological reasons — Europe has turned to the global liquefied natural gas market for supply, Bloomberg notes. The beauty of LNG is that once the gas has been super-cooled to about minus 160 Celsius, it transforms into a liquid that can be loaded into tankers and shipped around the world, very much like oil, breaking the need for pipelines. Thus, American LNG reaches European shores. And the continent has imported it with gusto. Year-to-date, Europe has sourced about 59% of its LNG from the US, with a peak of 64% in April as the closure of the Strait of Hormuz deprived it of supplies from Qatar and the United Arab Emirates. Further increases are likely later this year as Europe needs US gas to fill its storage tanks ahead of winter.

In major commodity markets, relying on a single source for more than 30% to 40% of total purchases is uncommon; relying on one originator for more than 60% is exceedingly rare. Only in some niche markets — minor metals such as rare earths, gallium or tungsten — is Europe so reliant on one source. Even that isn’t without qualms; the region is spending money and political capital to reduce that dependency.

Behind closed doors, European officials have been worrying about US LNG for a while. The concern went from private discussions to public debate just before Israel and the US attacked Iran on Feb. 28. “We know that we cannot rely on Russian gas, and that we should pay attention not to rely too much on American gas,” Teresa Ribera, the EU’s top competition chief, said in January. A few days later, EU energy commissioner Dan Jorgensen was even more explicit: “We risk replacing one dependency with another.”

History may be smiling. Back in 2016, Europe pondered whether to ban US LNG imports as leftist politicians objected to to the hydraulic fracturing — or fracking — process needed to tap shale geological formation. French officials went as far as telling two of their major utilities, Engie SA and Electricite de France SA, to stop contracting with American suppliers. “I’m going to examine legally how we can prohibit the import of shale gas, and in any case, these businesses will have to shift towards other markets to import only conventional gas,” Ségolène Royal, France’s minister of energy at the time, told lawmakers in May 2016.

Fast forward a decade, and Europe is consuming more US gas than ever. The 2026 debate about whether Europe should cap its American LNG imports died only days after it become public. As soon as war broke out in Iran, Europe again got worried about gas supply, this time from the Middle East. American LNG became a relief rather than a problem. Now that the war is ending, Brussels needs to take a fresh look at where it gets its energy today, and where it will get it in the future.

It helps to define what the problem is — and isn’t. Although the EU is buying about 60% of its liquefied gas from the US, the overall gas market is wider. Once pipeline supplies from the likes of Norway, Algeria, Libya and Azerbaijan are included, the US share of total gas supply drops to about 26% — still a significant proportion, but below the 40% share that Russian gas, via both pipelines and LNG, used to have.

From a political viewpoint, US President Donald Trump may be widely disliked in Europe, but he isn’t Putin, and the White House isn’t the Kremlin. Neither is the American LNG industry, all in private hands, comparable to Gazprom PJSC, the state-controlled Russian gas behemoth. American LNG isn’t the same as Russian pipeline gas: The latter offers zero flexibility if the seller closes the valves; while supplies of the former can be stopped too, it’s far easier to replace from the global market, provided Europe is willing to outbid every other buyer.

Still, energy security scholars say the most effective tool against supply disruptions is “diversity, diversity and diversity”. From that angle, Europe is relying too much on a single source. What could go wrong? The over-reliance gives Washington a diplomatic lever in all kind of negotiations with Brussels, above all in talks about trade and energy regulation. But the danger is less about Trump banning LNG exports — or imposing an export tax — and more about the inherent risk of buying all that gas from a few export plants, almost all located in close geographical proximity along the US Gulf of Mexico coast in Texas and Louisiana. Imagine if a hurricane hit that region, in the same way as several storms — Katrina and Rita in 2005, and Gustav and Ike in 2008 — damaged US oil refineries.

Ideally, Europe should reduce the share of US LNG toward safer levels, certainly below 50%. Under current market and political forces, though, the risk is that the opposite happens. Europe has promised Trump it will buy even more American commodities; it’s banning Russian LNG from 2027, and supplies from Qatar and the UAE still look uncertain. If the region isn’t careful, it could find itself relying on the US for more than 75% of its LNG in the not-too-distant future.

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