Unsettled by Greenland annexation threats, EU seeks to diversify way from US LNG dependency

Out of the frying pan and into the fire. Having struggled to reduce its dependency on Russian gas at enormous cost to its economy, the EU now finds itself with a new energy dependency that is potentially even more damaging than relying on cheap Russian gas. The problem has been made worse as the US is now the EU’s swing supplier of gas as Russian supplies continue to be phased out.

Following the showdown with the White House over control over Greenland, Brussels wants to reduce its dependency on American LNG. At its peak, Russian piped gas accounted for 45% of Europe’s gas imports, or just under 150bcm a year.

Since the war in Ukraine started and after an explosion destroyed the Nord Stream pipelines that delivered most of the gas, Brussels has radically reduced imports of piped gas. Both Hungary, Czechia and Slovakia have won carveouts due to their heavy dependence and lack of alternative supplies.

Russia has managed to offset some of the loss of its EU business by boosting LNG production and sales to Europe, which continues to struggle to source sufficient gas to power its economies, and continues to be hooked on Russian gas. However, the EU intends to ban Russian gas imports completely from January 1, 2027 as part of the nineteenth sanctions package.

Last year the EU continued to be Russia’s biggest gas customer, importing 50% of Russian LNG (chiefly France, Belgium, and Spain), China 22%, and Japan 18% in 2024. The EU is also the largest buyer of pipeline gas from Russia (35%), followed by China (30%) and Turkey (29%). Meanwhile, despite US sanctions, Moscow has managed to export LNG from the Arctic LNG 2 project, with China serving as an intermediary.

Since the end of Russian piped gas and transiting to Europe via Ukraine, which have dropped by 80% from pre-war volumes according to the International Energy Agency (IEA), US LNG has become the swing supplier. That means relatively small changes in US supplies have an amplified effect on supplies and prices, giving the US additional leverage over Europe when it comes to energy security.

The fact that unlike piped gas, LNG has effectively been commoditised and can be sold to other markets, means US supplies are a lot less reliable than Russian piped gas which by definition can only have one customer. Cutting off Russian supplies to the EU hurts Russia as much as it hurts the EU and so limits the appeal of using gas as a political tool. As US gas can easily be sold to Asian markets, which consume even more LNG than Europe, there is little pain incurred from the US redirecting LNG deliveries to other markets. Demand for US LNG has been amplified in recent weeks as the world faces a big freeze of one of the coldest winters in years that has seen demand for gas spike, as IntelliNews Lambda reported, driving up prices by a third since the start of this year.

What reductions there have been has been made possible by massively boosting imports of US LNG, however, as bne IntelliNews reported, that has simply created a new dependency on the US and with the Trump administration downgrading the US-Europe special relation with as part of his new “Donroe Doctrine”, detailed in December’s National Security Strategy (NSS), Europe’s status is now little more than “a market” as far as US foreign policy is concerned.

Moreover, under the new economic paradigm of Trump’s transactional world view, there is no assurance Trump will use energy supplies even more aggressively than Russia. The Soviet Union began its first deliveries to Austria in the 1970s, which continued throughout the Cold War without problems. Gazprom Export, the trading arm of the state-owned energy behemoth, always insisted that even in Soviet Times the company remain a “reliable energy partner” that would not let politics interfere with its export business – a rule that held true for over two decades into the modern Russian era.

The Trump administration has made no such promises. Indeed, Trump has aggressively been pushing US energy exports on his so called partners. As part of the trade negotiations with European Commission President Ursula von der Leyen last March, in addition to forcing her to concede a 15% tariff on EU imports to the US, with no reciprocal arrangement for US imports to Europe, he got her to agree to a nonbinding commitment to import $750bn of US energy over three years in a deal that analysts called “delusional.”

Brussels was willing to swallow that unpalatable offer, in the hope of improving US relations over time. However, since Trump threatened to invade and annex Greenland, both an EU and Nato member, it seems the Eurocrats have reassessed their ties to Washington and are backing away, looking to more actively diversify away from US relations for national security reasons.

That will be hard to do. The LNG business remains an immature business with the US and Qatar dominating, and Russia as a third major player.

The EU is exploring new sources of LNG supply to reduce its reliance on the US to improve its energy security. The US has since surpassed Russia’s share of supplies in its heyday and now accounts for a whopping 60% of Europe’s LNG imports. Looking at the overall EU gas supply mix—which includes pipeline gas (mainly from Norway, Algeria, and Azerbaijan, a new addition to the fuel supply mix), LNG from various sources, and domestic production—US LNG represented about 20–25% of total EU gas supply in 2025.

At a press conference on January 31, European Commissioner for Energy Dan Jørgensen said the EU would remain a major customer for US LNG but was now actively seeking alternatives.

“We are looking at high-potential exporters including Canada, Qatar and Algeria,” Jørgensen said. “Europe doesn’t want to cut off American LNG, but we have decided that we now need to find additional strategic options.”

Jørgensen added that the review was prompted by “the strained relationship to the US and the fact that we have an American president that does not exclude using force against Greenland.”

Although US leadership has since disavowed the suggestion that it could attempt to seize Greenland militarily, the rhetoric has intensified European unease about its dependence on American policy decisions for critical energy supplies. As bne IntelliNews reported, Trump is trying to systematically dismantle the international rules-based order and the long standing “special relationship” between the US and Europe has been abandoned. Trump is as prone to attack his long standing partners like the EU and Canada as he is to his rivals like Russia and China.

Greenland, an autonomous territory of Denmark, has long been of strategic interest to Washington, but the tone of recent statements has surprised European officials.

The White House responded to the EU's concerns by reaffirming its role as a reliable partner. “Thanks to President Trump, US suppliers are the best, most reliable partners, and we will continue to work with European nations to meet their energy demands with US LNG,” spokeswoman Taylor Rogers told Bloomberg this week.

Since cutting ties with Gazprom in 2022, the EU has accelerated the buildout of LNG terminals and increased pipeline imports from Norway to diversify its energy mix.

The effort to diversify away from relying on US energy comes as part of a more general push by the EU to diversify its trade away from an increasingly unreliable US. In just the last few weeks, top European leaders have been in China, India and Japan to sign off on trade deals that have been under negotiation for decades. European Commission President Ursula von der Leyen signed what she dubbed “the mother of all deals” with India last week. French President Emmanuel Macron was also in Beijing in December to sign new trade deals to improve France's access to China’s market. And UK Prime Minister Keir Starmer was also in China and Japan last week on a trade mission where he said he signed deals worth billions of pounds.

Nevertheless, the EU-US pair remains the largest trade partnership on the planet. The American market accounts for a fifth of EU exports, generating a goods turnover of just under $1 trillion and another $400bn from services. In 2025 the EU is estimated to have earned $25bn profit from its trade surplus with the US.