The Trump administration is full of contradictions. Last Tuesday, the US President said that while some movement might be possible, high tariffs will remain on most Chinese goods. On Thursday, Treasury Secretary Scott Bessent said that US tariffs on China are unsustainable.

Similarly, Politico reported that the US would lift sanctions on natural gas pipelines running from Russia to Germany, including the currently defunct Nord Stream 2 pipeline. Yet within hours, Secretary of State Marco Rubio rejected the reporting as “a piece of fiction”. With Trump saying that a peace deal in Ukraine is “pretty close”, it is worth pondering the state of Russian energy in a post-war settlement.

While the world was focused on Trump’s tariffs, something remarkable happened in the background: Saudi Arabia and Russia effectively agreed to take Opec off the global energy chessboard. In a surprise move, the once powerful cartel announced an increase in oil production despite relatively low prices. The US wants oil at $50 per barrel, and it looks like it will get it. All the high-profile meetings in Saudi Arabia between US and Russian representatives were supposedly about the future of Ukraine, but it is more than likely that future energy markets were also discussed.

Russia, Saudi Arabia, and the United States are the world’s three largest producers of hydrocarbons, and if you want to alter the global energy trade, those are the three parties you want in a room together.

Shortly after the announcement of an increase in production, it was reported that Saudi Arabia had discovered 14 new oil and gas fields. Furthermore, Russia and the United States are actively exploring the potential for cooperating on energy projects in the Arctic. Now add to this the unexpected progress in the US-Iranian nuclear talks and the continued pressure on Venezuela, the country with the world’s largest oil reserves. All of this appears to be aimed at bringing down global energy prices, very much to the frustration of US oil and gas companies. In the energy sector, profits depend on price not volume, so the cheaper oil and gas become, the worse it is for the bottom line of these companies.

Although the US fossil fuel sector may be partially compensated through future tax cuts, it now looks clear that Trump wants cheap energy for consumers, not high profits for producers. Of course, by “consumers” the focus is on American consumers, not the world as a whole. One way to sell his policy to American energy producers could be the further opening of export markets, especially Europe. Trump has already complained about the trade deficit with the EU, and liquefied natural gas (LNG) could be an effective way to create a better balance. In this scenario, the US market would remain open for European goods, and the European market would open up (maybe even exclusively) for American energy. This could be the very kind of deal the Trump administration is hoping to make.

As Trump stands to gain from a lack of Russian gas in the European and global markets, it may be worth taking Marco Rubio at his word. Lifting sanctions on Russian energy may indeed be pure fiction. The unfortunate reality of Europe’s energy policy is that it can only choose on whom to depend, independence is now impossible.

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Ralph Schoellhammer is assistant professor of International Relations at Webster University, Vienna.

Raphfel

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