The Trump administration is pushing through a new series of oil and gas deals, leaning again on US energy exports as a key lever in broader trade negotiations.
As Saudi Arabia’s Crown Prince Mohammed bin Salman visits the White House this week, Saudi Aramco is expected to sign two deals to import US liquefied natural gas. Trump and MBS are also expected to discuss a possible deal to advance Saudi Arabia’s nuclear power program.
Meanwhile, the US also agreed to increase exports of liquefied petroleum gas to India, and to sell more LNG to Ukraine, which is facing a deep gas deficit following Russian attacks on its pipelines and gas wells.
While these deals offer a compelling route for Washington to strengthen its hold on global energy markets, they risk overselling what the US can actually provide: Fulfilling the US trade deal with the European Union this year would already require the US to redirect almost all of its existing fossil fuel exports there.
And it’s not clear that global demand for US LNG will really match the administration’s expectations: Goldman Sachs analysts warned in a note today that LNG prices will face a significant drop later this decade as supply overwhelms demand — but could perk back up in the 2030s, depending on how quickly China works to displace coal in its power sector.