Ottawa, January 21 – Over the past five years, the European Union (EU) has grappled with an ongoing energy crisis, shaped by post-pandemic economic shifts and supply disruptions caused by the Russia-Ukraine conflict. While recent efforts have brought some degree of stabilization, uncertainty looms as the incoming Trump administration signals shifts in economic policy that could complicate Europe’s energy security.

The global rebound in energy demand following post-pandemic-related economic restrictions caused unexpected pressure on Europe’s gas supply. Underinvestment in domestic energy infrastructure left European producers unprepared for the surge, forcing greater reliance on fossil fuels, and a need for foreign energy imports. During this time, China saw a rise in demand and intake of liquefied natural gas (LNG), driving up global prices. This increase made it substantially more expensive for European states to secure necessary imports. These challenges and shortfalls in wind and hydro-powered energy production further intensified the crisis, leaving European governments scrambling for solutions.

Russia, a key figure in the supply and delivery of crude oil, provided approximately 155 billion cubic meters of natural gas to the EU, accounting for 45% of its total imports in 2021. However, following Russia’s invasion in February 2022, EU policymakers imposed what the Council of the European Union described as “massive and unprecedented sanctions” in response to violations of the United Nations Charter. These measures led to a sharp reduction in Russian gas imports, which dropped to just 8% by 2023. The impact was immediate for households and businesses, as electricity prices surged from an average of €20 per megawatt-hour before the crisis to a peak of €340 in August 2022, according to a report by the European Council.

To mitigate soaring energy costs and compensate for the loss of Russian gas, the EU turned to alternative suppliers, significantly increasing its LNG imports from the United States, which accounted for 49% of European LNG imports in 2021. This transition required urgent expansion of LNG infrastructure, leading to the development of an additional 36.5 billion cubic meters of LNG capacity. Despite these efforts, Russia remains a steady supplier to countries such as Spain, France, and Belgium, underscoring the difficulty of completely severing energy ties with Moscow.

While the shift toward US LNG helped stabilize Europe’s energy supply, it also introduced new vulnerabilities. Unlike Russian pipeline gas, LNG shipments from the United States require specialized transport, making them more expensive and subject to logistical constraints. Yet, reducing reliance on US energy seems unlikely, particularly as the Trump administration signals a more aggressive stance on trade.

In December, Donald J. Trump took to social media platform X to issue a warning to the EU:

“I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!”

While no formal tariffs have been announced, his statement reflects growing pressure on Europe to increase energy purchases from the US. In addition to trade threats, Trump has declared a “national energy emergency,” a means of justifying the loosening of environmental regulations and fast-track of domestic energy projects. Among the most significant changes are expedited permit approvals for new infrastructure and expanded drilling operations in Alaska, both of which align with the projected 2% annual increase in US electricity consumption. However, regulatory conflicts could emerge. The EU’s tightening methane emissions regulations may restrict U.S. gas imports, particularly if Washington scales back environmental oversight. Additionally, Trump’s skepticism toward climate policies, and a possible withdrawal from international climate agreements, could hinder cooperation on green energy investments as the EU pushes forward with its decarbonization strategy.

Trade tensions may also rise if Trump reintroduces energy-related tariffs, such as duties on European renewable technologies. While both sides share a vested interest in energy security, Trump’s "America First" approach could heighten friction over pricing, regulation, and supply chain dependencies, making the next few years uncertain for transatlantic energy diplomacy.

Despite Europe’s efforts to diversify its energy sources, its heavy reliance on external suppliers continues to pose economic and geopolitical risks. Energy prices remain volatile, and any policy shifts by the Trump administration could place additional financial strain on European nations. The EU must navigate a complex balance between energy security, affordability, and its long-term climate commitments. While investment in renewable energy and regional cooperation could help reduce dependency on foreign energy sources, these solutions require significant time and financial resources.

The EU’s energy crisis underscores the fragility of its current model, which is highly susceptible to external pressures. While short-term measures have provided temporary relief, high costs, and political uncertainty, exacerbated by potential US trade policies, raise concerns about long-term energy stability. Europe needs to begin shifting its energy strategy to accelerate investment in renewable energy, strengthen internal energy networks, and implement structural reforms to reduce reliance on volatile global markets. As noted by the International Monetary Fund, achieving an integrated energy infrastructure remains a complex challenge, further complicated by ongoing disagreements among European policymakers. The path forward is uncertain, but proactive measures will be essential in securing a stable and sustainable energy future for the EU.

Works Cited

Catherine Boudreau, Dominick Reuter. “Trump Declares a National Energy Emergency and Moves to Boost US Production of Oil and Gas.” Businessinsider.Com, Business Insider, 20   Jan. 2025, www.businessinsider.com/trump-energy-dominance-oil-gas-prices-taxes-2025-1

“EU Can Stand up to Us, China with Integrated Energy Market, IMF States | Reuters.” Reuters.Com, Reuters , 16 Jan. 2025, www.reuters.com/business/energy/eu-can stand-up-us-china-with-integrated-energy-market-imf-states-2025-01-16/. 

“EU Sanctions against Russia Explained - Consilium.” Consilium, European Council, www.consilium.europa.eu/en/policies/sanctions-against-russia-explained/. Accessed 19 Jan. 2025. 

“Europe’s LNG Capacity Buildout Outpaces Demand.” IEEFA, 31 Oct. 2023, ieefa.org/articles/europes-lng-capacity-buildout-outpaces-demand

Fleming, Sean. “5 Things You Should Know about Europe’s Energy Crisis.” World Economic Forum, 13 Oct. 2021, www.weforum.org/stories/2021/10/5-facts-europe-energy-crisis/

Patterson, Scott. “Trump to Declare National Energy Emergency.” WSJ.Com, The Wall Street Journal, 21 Jan. 2025, www.wsj.com/livecoverage/trump-inauguration-president-2025/card/trump-to-declare-national-energy-emergency C3ewqcqGnFBC1c215oKe. 

Smyth, Jamie, et al. “Why Europe Will Struggle to Buy More US Gas.”, Financial Times, 20 Jan. 2025, www.ft.com/content/e33d9eec-b34c-4afc8948-dda91ccbb70d

U.S. Liquefied Natural Gas Exports to Europe Increased during the First 4 Months of 2022 – U.S. Energy Information Administration (EIA), U.S. Energy Information Administration, 7 June 2022, www.eia.gov/todayinenergy/detail.php?id=52659.