US President Donald Trump wants Europe to buy more US gas or face tariffs, and ten EU member states have called again for an end to all Russian imports. Neither of these things are going to happen. Europe remains hooked on Russian gas.

“Large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” Trump posted on social media last month.

That was followed by comments from European Commission President Ursula von der Leyen shortly after her re-election as the European Commission (EC) president: “Why not replace [Russian gas] by American LNG?” she asked in an effort to curry favour with the mercurial US leader.

The problem that they both face is, despite their political desire to change the nature of the Europe energy market and cut Russia off from an important source of income, Europe’s gas market is commercial and neither leader has any power to force companies to switch suppliers. The brutal truth is that Russian LNG is cheaper than US gas.

Trump is hoping to force the issue by imposing duties on Europe if it doesn’t buy more LNG. The freshly inaugurated president signed over 100 decrees on his first day in office, including ending all restrictions on developing new deposits and lifted a ban on exports of LNG to Europe. In his inauguration speech, he promised to make America rich again by exploiting its hydrocarbon reserves, “the biggest in the world.”

The politicians are being ignored by the market. Europe imported a new record amount of Russian gas in 2024, up 14% year on year to 23.5bn cubic metres, still a fraction of the circa 150 bcm a year that Europe used to import pre-war.

The end of cheap Russian piped gas supplies has had a devastating impact on the EU’s economy. Germany has been particularly hard hit, posting two consecutive years of economic contraction in January for the first time since the 1990s, as it de-industrialises. German companies simply cannot afford to pay more for energy when energy prices are already currently triple their long-term pre-war average.

On one hand, European politicians are calling for a total ban on Russian gas imports; on the other hand, the companies are buying every cubic centimetre they can get their hands on. Spain, France and Belgium are by far the largest purchasers.

But things may change as new LNG production comes on line in the coming years. Industry analysts at S&P Global Commodity Insights project that US LNG supplies to Europe could eventually surpass the current import volumes. They estimate 14.2 bcm (10.3mn tonnes) of LNG are already contracted for European delivery from US plants currently under construction, with an additional 13.1 bcm (9.5mn tonnes) available for purchase, which should all come online by 2029.

At the same time, the EU’s natural gas demand is forecast to decline by as much as 25% by 2030 compared to 2023 levels, helping to swing the balance to America’s disadvantage, according to the International Energy Agency (IEA).

Asia will play a role too, drawing LNG away from Europe. Already the world’s biggest consumer of LNG, Jarand Rystad, CEO and founder of Rystad Energy, told CNA that the demand for LNG will double in the next five years, as “this is a construction process”. Willing to pay more, US tankers are likely to be diverted to the most lucrative Asia markets only worsening Europe’s gas supply problems.

“The price issue is a delicate and decisive one,” a senior EU official told the Financial Times in a recent interview.

Meanwhile, European regasification infrastructure could accommodate additional imports, providing potential leverage for diversification. However, this hinges on whether EU policymakers or governments decide to set up a strategic LNG reserve to facilitate purchases from the US.

Ukraine would love to see a strategic reserve created which could be stored in its underground gas tanks on the EU border – the largest on the Continent. But there are problems with this idea too. In 2023, European gas traders stored just over 3 bcm in Ukraine’s tanks while speculating that prices would rise in winter. However, they didn’t repeat the profitable bet in 2024 after Russia started targeting the gas storage facilities with missiles. Buried deep underground, Russia’s missile attacks have been ineffective, but the increased risks were enough to make Ukraine’s tanks an unappealing place to store gas this winter.

In the short term the pressure to import more gas will grow in the summer of 2025. Ukraine refused to renew the gas transit deal with Russia signed in 2019 that expired on January 1 taking another 15 bcm out of the market. At the same time, colder temperatures this year mean that gas is being removed from the EU storage tanks at a faster rate than usual. The EU is on track to end the heating season with its tanks 35% full, well below the previous year’s 60% level. That means the EU will have to find an additional 10bcm to make up for this year’s extra cold weather usage plus another extra 15 bcm on top of that to replace the end of Ukraine’s supplies. Doing this without importing Russian gas is currently impossible.

Other global suppliers, including Qatar and Canada, are also planning to ramp up LNG production that will ease the pressure in the medium term, for the next two years at least, the EU must navigate an increasingly competitive market while at the same time it attempts to reduce its exposure to Russian energy as well as deal with Trump’s tariff threats.