Trump wants EU to buy more US oil and gas or face tariffs

According to Reuters, US President-elect Donald Trump said on Friday that the European Union (EU) may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world's largest economy.

The EU is already buying the lion's share of US oil and gas exports, according to US government data, and no additional volumes are currently available unless the United States increases output or volumes are re-routed frm Asia - another big consumer of US energy.

"I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas," Trump said in a post on Truth Social.

"Otherwise, it is tariffs all the way!!!," he added.

The European Commission said it was ready to discuss with the president-elect how to strengthen an already strong relationship, including in the energy sector.

"The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply," a spokesperson said.

The United States already supplied 47% of the European Union's LNG imports and 17% of its oil imports in the first quarter of 2024, according to data from EU statistics office Eurostat.

Trump has vowed to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.

Trump has repeatedly highlighted the US trade deficit for goods, but not trade as a whole.

The US had a goods trade deficit with the EU of 155.8 billion euros (US$161.9 billion) last year. However, in services it had a surplus of 104 billion euros, Eurostat data shows.

Trump, who takes office on January 20, 2025 has already pledged hefty tariffs on three of the United States' largest trading partners - Canada, Mexico and China.

Most European oil refiners and gas firms are private and the governments have no say on where the purchases are coming from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.

The EU has steeply increased purchases of US oil and gas following the block's decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.

The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids or a fifth of global demand.

US crude exports to Europe stand at over two million bpd representing over a half of US total exports with the rest going to Asia. The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the US government data.

The United States is also the world's biggest gas producer and consumer with output of over 103 billion cubic feet per day (bcfd).

The US government projects that US exports of liquefied gas (LNG) will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of US LNG exports, with the Britain, France, Spain and Germany being the main destinations.

EU exports are dominated by Germany with key goods being cars, machinery and chemicals.

 

Iraq:: Chinese to explore oil and gas

According to Reuters, Chinese companies won bids to explore five Iraqi oil and gas fields on Saturday in a licensing round for hydrocarbon exploration that was primarily aimed at ramping up gas production for domestic use.

An Iraqi Kurdish company also took two of the 29 projects up for grabs in the three-day licensing round across central, southern and western Iraq, which for the first time includes an offshore exploration block in the country's Arab Gulf waters.

Iraq aims to lure billions of dollars of investments to develop its oil and gas sector as it looks to ramp up local petrochemicals production and end imports of gas from neighbouring Iran that are currently key to producing power.

More than 20 companies pre-qualified for the licensing round, including European, Chinese, Arab and Iraqi groups.

Notably, there was no US oil majors involved, even after Iraqi Prime Minister Mohammed Shia met with representatives of US oil firms during an official visit to the United States last month.

Zhongman Petroleum and Natural Gas Group (ZPEC) took the northern extension of the Eastern Baghdad field, in Baghdad, and the Middle Euphrates field that straddles the southern Najaf and Karbala provinces, the oil ministry said.

China's United Energy Group Ltd won a bid to develop the Al-Faw field in southern Basra, while ZhenHua won a bid to develop Iraq's Qurnain field in the Iraqi-Saudi border region and Geo-Jade won a bid to develop Iraq's Zurbatiya field in the Wasit.

Two oil and gas fields were taken by Iraq's KAR Group - the Dimah field in eastern Maysan province, and the Sasan & Alan fields in Iraq's northwestern Nineveh province - the ministry said.

Around 20 more projects are open for bidding on Sunday and Monday.

Falah Al-amri, the Iraqi prime minister's advisor for oil and gas issues, said the government hoped the new projects would raise oil production to 6 million barrels per day by 2030 from around 5 million now.

The government also wants the projects to produce enough natural gas so that, along with plans to all-but eliminate gas flaring by 2030, Iraq could end imports.

"It is too early to talk about (gas) exports. We want to get self-sufficient," Al-amri told Reuters.

Iraq, OPEC's second-largest oil producer after Saudi Arabia, at one time had targeted becoming a rival to the Gulf Arab kingdom with output of over a tenth of global demand.

But its oil sector development has been hampered by contract terms viewed as unfavourable by many major oil companies as well as recurring conflict and political paralysis.

Growing investor focus in recent years on environmental, social and governance criteria have also had an effect.

Western oil giants such as Exxon Mobil Corp and Royal Dutch Shell Plc have departed from a number of projects in Iraq while Chinese companies have steadily expanded their footprint.