Europe’s energy transition collides with Trump’s fossil fuel ambitions FT analysis

The recent announcement of a landmark US-EU energy agreement, unveiled by President Donald Trump and European Commission President Ursula von der Leyen, has generated considerable debate among energy experts and market analysts. The deal commits European companies to purchase an unprecedented $750 billion worth of American energy—comprising oil, natural gas, and nuclear technologies—over the next three years. However, according to the latest analysis by the Financial Times, industry specialists warn that these targets are unrealistic and grounded in overly optimistic projections, raising serious doubts about the deal’s practical implementation.

Under the terms of the agreement, EU companies would be expected to acquire $250 billion in US energy annually. Yet, as Matt Smith of consultancy Kpler observes, this figure appears detached from commercial realities: “Companies are beholden to their shareholders and have a duty to buy the cheapest feedstock,” he says, emphasizing that the EU cannot compel private entities to prioritize US energy purchases irrespective of market conditions.

The announcement sought to position energy cooperation at the core of what Trump described as one of the most consequential trade deals ever, effectively sidestepping an imminent tariff conflict between two of the world’s largest economies. While the Trump administration champions a vision of American “energy dominance” fueled by expanded fossil fuel production, the shale industry’s growth has slowed since his return to office.

Initial market reactions were positive, with US energy shares rising on expectations that the deal could bolster liquefied natural gas (LNG) and oil exporters—already benefiting from Europe’s efforts to diversify away from Russian supplies. Yet enthusiasm quickly tempered as analysts scrutinized the lack of concrete details beyond the headline figures.

To contextualize, the EU’s energy imports totaled over $435 billion last year, of which US fossil fuel supplies accounted for merely $75 billion. Although the EU intends to phase out Russian gas imports entirely by 2028—potentially opening market opportunities for US LNG—the sheer scale of the $250 billion annual target demands a dramatic and sustained increase in American exports amid a push in Europe for energy transition and cost reduction.

Anne-Sophie Corbeau, an energy analyst at Columbia University’s Center on Global Energy Policy, highlights the inherent contradictions: “This would require Europe to import significantly more US gas and oil, diverting from other suppliers, all while assuming energy prices stay high or rise to meet the target. But Europe wants to lower energy bills, and Trump wants to reduce oil prices—this agreement makes no sense.”

From the American perspective, the deal is viewed more optimistically. The American Petroleum Institute, representing major US oil interests, regards the agreement as a reinforcement of America’s position as a key supplier to Europe. LNG executives anticipate it will aid in securing financing for new liquefaction infrastructure, especially in the Gulf of Mexico—the US’s export hub.

For instance, shortly after the announcement, Venture Global—a US LNG exporter with multiple European contracts—confirmed plans to proceed with a $15 billion project designed to produce 28 million tonnes of LNG annually, nearly half of Germany’s current gas consumption. CEO Mike Sabel praised the trade deal, though he acknowledged that project financing predated the announcement.

Market responses reflected cautious optimism: Venture Global’s shares rose nearly 8% early Monday, with rivals Cheniere Energy and NextDecade up approximately 5%. The broader S&P 500 energy sector closed modestly higher.

Nonetheless, industry experts remain skeptical. The Trump administration’s past agreements, such as the 2020 US-China trade deal—where promised increases in Chinese purchases failed to materialize—serve as cautionary precedents. Kevin Book of ClearView Energy Partners noted, “The phase one managed trade with China offers an inauspicious precedent for the $750 billion EU energy pledge.”

Meanwhile, Bill Farren-Price, head of gas research at the Oxford Institute for Energy Studies, pointed out structural challenges: “European gas demand is soft, energy prices are falling, and private companies—not states—make energy procurement decisions. Regardless of political agreements, renewables are increasingly dominating Europe’s energy landscape.”

In summary, while the US-EU energy deal aims to deepen transatlantic cooperation, its ambitious purchase targets face significant hurdles in market realities, regulatory frameworks, and Europe’s accelerating energy transition. As such, many view the pact as more symbolic than achievable in its current form.

By Tamilla Hasanova