Following the onset of Russia’s war on Ukraine, the EU decided to reduce its dependency on Russia, particularly regarding gas and oil. This led to a further increase in LNG imports (all-time high of 14.9 bcf/d as annual average) from its allies and partners since March 2022. In this context, Europe became the primary destination for US LNG exports, accounting for 6.8 bcf/d. This trend continued in 2023, with the US exporting 7.1 bcf/d (annual average) or 48 % of its total exports to the EU. Daniel S. Hamilton and Joseph P. Quinlan note that, despite its benefits, this increase benefits the US more than the EU.
Gas imports cost the EU around US$400 billion in 2022, more than three times the 2021 levels. Moreover, while gas prices dropped significantly in 2023, they have remained above their historical average since. This further impacts the cost of electricity in the EU, and has raised concerns about the loss of EU industrial competitiveness. In January 2024, the Biden administration paused LNG export approvals, to assess their impact on domestic energy prices and global greenhouse gas (GHG) emissions; this led some to wonder whether, instead of achieving energy security, the EU had merely traded its reliance on Russia for reliance on the US.
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