By Avi Salzman
President Donald Trump sees American fossil fuels as a potent weapon in conflicts around the world. The most dramatic example of Trump's mindset is in Venezuela, where he's taken control of the country's oil and is urging U.S. firms to rebuild its energy industry. But energy is also at the center of Trump's spat with Europe, which is resisting his efforts to take control of Greenland. "Mineral fuels," which include oil and liquefied natural gas (LNG), are Europe's largest import from the U.S. A trade war with Europe would almost certainly ensnare energy products.
"There's obviously a lot of transatlantic tension between the US and Europe," said Ben Cahill, director for energy markets and policy at the Center for Energy and Environmental Systems Analysis at the University of Texas at Austin. "LNG is not the cause of that story. In fact, it's a point of strength. But it's being pulled into this broader economic and trade dilemma they have."
The fallout isn't looking good for energy companies.
Tension between the U.S. and Europe adds strain to a relationship that's been very profitable for American energy companies. European LNG imports hit a record in 2025, and the U.S. accounted for a record 56% share of them, according to Anne-Sophie Courbeau, a research scholar at Columbia University's Center for Global Energy Policy. The armada of U.S. ships carrying oil and LNG kept the lights on in Europe when Russia invaded Ukraine in 2022, and enriched U.S. LNG exporters like Cheniere Energy and Venture Global.
A trade war threatens that very lucrative relationship.
"There is a geopoliticization of LNG, and I am not sure this is good for the LNG industry," Courbeau wrote in an email.
That may be one reason U.S. energy stocks were flat on Tuesday, despite global oil prices rising 1.6% and European LNG futures prices increasing 3.6%. Cheniere Energy stock was down 1.3%, and Venture Global fell 3.4%.
So far, neither the U.S. nor Europe has made explicit threats about energy. Trump says he could add 10% tariffs to products from eight European countries in retaliation for their refusal to allow the U.S. to take over Greenland. Trump's trade wars have already caused one trade partner to spurn US LNG. China has stopped importing it since the two countries escalated their trade fight last year.
That's not likely to happen in this case. Europe has few near-term options for replacing American LNG. Qatar could theoretically step in, but the EU has been in a dispute with Qatar over environmental and human rights regulations. Trump could theoretically block U.S. exports to Europe, but that would mostly hurt U.S. companies. He's been much more focused on forcing Europe to buy more LNG. The trade deal that the two sides agreed to last year included a requirement for the EU to buy $250 billion worth of U.S. energy per year -- a number that most analysts think is much too high to be realistic.
The EU has no clear way to extricate itself from U.S. energy. The latest spat, however, could accelerate Europe's efforts to wean itself off of natural gas, in favor of cleaner alternatives, including renewables or nuclear power.
"Until now, US LNG has been free to go wherever it wanted based on fundamentals and contracts signed," Courbeau wrote.
If governments have more power than companies, that flexibility could go away.
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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January 20, 2026 15:20 ET (20:20 GMT)
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