Oil dipped about a $1 after the WaPo reported that the Biden administration and European Union are expected to announce a major initiative to direct shipments of liquefied natural gas to Europe during the US president’s visit to Brussels this week. The announcement would come as European officials have asked the US to do more to help them cut their dependence on Russian energy sources.
The announcement, part of a “dramatic effort” to deprive Russia of leverage as it continues to batter Ukraine, would mark an unusual move to reorder the world’s energy flow — a shift that could have an impact long after the war is over. It comes as European officials have asked the United States to do more to help them cut their reliance on Russia for oil and natural gas.
Biden’s national security adviser, Jake Sullivan, said an agreement would be announced as soon as Friday. According to one US official, it is intended to ensure supplies of American natural gas and hydrogen for Europe.
Sullivan told reporters aboard Air Force One on Wednesday:
A major priority for both the president and his European allies is to reduce the dependence of Europe on Russian gas, full stop, and the practical road map for how to do that – what steps have to be taken, what the United States can contribute, what Europe has to do itself.
Speaking to EU lawmakers in Brussels on Wednesday, the European Commission president, Ursula von der Leyen, said all EU members “can contribute in reducing our dependency on Russian gas”.
Energy policy is also security policy.
With REPowerEU we have set the way forward.
Tomorrow I will discuss with @POTUS how to prioritize LNG deliveries from 🇺🇸 to 🇪🇺 in the coming months.
We are aiming to have a commitment for additional supplies for the next two winters. pic.twitter.com/xK8DnWHPxT
— Ursula von der Leyen (@vonderleyen) March 23, 2022
Of course, sending an LNG flotilla to Europe is nothing new and this plan has been floated for a while – a well-known snag here is that Germany has no LNG terminals to onboard any shipments, and so will need at least 1-2 years to build the required facilities at a cost in the billions. It’s probably also why after surging more than 20% yesterday following news that Putin will only accept rubles for Russian gas purchases, European gas prices have barely budged following the WaPo report.