The energy deal that US President Donald Trump cut with European Commission President Ursula von der Leyen over the weekend is unrealistic, Clyde Russell, Reuters Asia Commodities and Energy Columnist argues.

Since the bust up with Russia in 2022, Europe has become heavily dependent on imports of oil and gas from the US. But the EU’s total imports amount to about $65bn of energy of all sorts, against the EU’s total energy imports of $295bn in 2024.

“Putting together the value of EU imports of US crude oil, LNG and metallurgical coal gives a 2024 total of around $64.55bn,” Russell wrote in an opinion piece on July 28. “This is about 26% of the $250bn the EU is supposed to spend on US energy a year under the framework agreement.”

However, Trump and von der Leyen agreed that the EU would almost quadruple its imports of energy to $250bn of US energy annually over three years in the new trade deal that also imposes a 15% tariff on EU exports to the US for most products but leaves US imports into the EU duty free.

“The scale of the delusion probably exceeds what Trump and China agreed in their so-called Phase 1 trade deal in December 2019, under which China was supposed to buy $200bn of additional US energy by the end of 2021,” opined Russel, who said an increase of this scale would disrupt global energy markets and that US producers would struggle to produce that much fuel. “It's still clear that the commitment to buy $250bn in US energy is completely unrealistic and unachievable.”

Delusional level of imports

Trump’s deals are more show than substance, says Russel. Despite imposing a $200bn of additional energy purchases on China earlier this year, Beijing never came close to buying that much energy. The EU deal is fated to go the same way, says Russel.

“This is a delusional level of imports that the EU has virtually no chance of meeting, and one that US producers would also struggle to supply,” says Russel.

The numbers simply do not add up. In 2024, EU imports of US energy — crude oil, LNG, and metallurgical coal — amounted to $64.55bn. Even if imports of all three commodities were massively expanded, reaching the $250bn target would require 85% of total EU energy import spending to be directed to the US.

Oil: The EU imported 3.38bn barrels of seaborne crude in 2024, paying an estimated $236.6bn at $70 per barrel. Of that, only 573mn barrels, worth $40.1bn, came from the US.

Adding refined products, such as 110mn barrels of diesel worth $10.9bn, and even including nuclear fuel, does little to bridge the gap. “It’s still clear that the commitment to buy $250bn in US energy is completely unrealistic and unachievable,” Russel noted.

LNG: the EU imported 82.68mn tonnes of LNG in 2024, valued at $51.26bn, of which the US supplied just 35.13mn tonnes, worth $21.78bn.

Coal: the EU imported metallurgical coal used to make steel worth $6.72 billion in 2024 of which $2.67bn came from the US.

On the supply side, US exports of crude, LNG, and metallurgical coal totalled $165.8bn in 2024. Even if every barrel, tonne, and cubic metre went to Europe, the target would still not be met, according to Russel.

Analysts speculate that von der Leyen agreed to the deal, knowing that it could never work in practice and that the EU will not be obliged to meet the $250bn target. In the meantime, Brussels will prolong the talks, try and avoid penalties, and wait for the midterm elections next year when the Republics, and Trump, could lose their majority in Congress.

“Run down the clock, talk nice, and hope the next US president is easier to deal with,” Russel said.

Confusion of tariff regime details

In parallel, the other part of the deal referred to von der Leyen acquiesce to the White House demand that a 15% tariff be imposed on all EU imports to the US.

However, in her speech announcing the deal, von der Leyen made it clear that a lot of negotiating remains to be done. She went through various product groups, but noted that there were multiple exemptions and on key strategic products such as pharmaceuticals the tariffs on many specific products have not been agreed yet.

“The EU agreed we have 15% for pharmaceuticals.” But she added, “Whatever decisions later – by the president of the US – that’s on a different sheet of paper," von der Leyen said. 

Trade deals are very complicated and can take years to negotiate, producing thousands of pages of detail, whereas this deal has been rushed through in a matter of months following Trump’s Liberation Day announcement in April.

Parts of the US–EU deal are already facing interpretive divergences. Trump claimed EU pharmaceuticals would face higher tariffs, contradicting von der Leyen’s statement that a 15% rate had been agreed. Disagreement also persists over steel and aluminium, with Trump saying the 50% tariff remains, while the EU anticipates a quota-based reduction.

 

Few details have been released so far and the months ahead will be consumed with more negotiations over individual product groups. With the contradictory messaging, and implausible figures, “this new deal may soon join its predecessor as a symbol of overpromised and underdelivered trade diplomacy,” Bloomberg said in a comment on the deal.

As widely reported, the basis of the tariffs assigned by Trump to countries in his Liberation Day list, bares no relationship to economic trade policy theory and were arbitrarily invented on a simplistic formula that takes the trade deficit between the US and a country and halves it.