The misery of Ukrainians reinvigorated the US oil and gas industry

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The misery of Ukrainians reinvigorated the US oil and gas industry

Nearly a year has passed since the outbreak of the hostilities in Ukraine, yet there is no indication of a settlement on the horizon. Many military and political observers predict that the conflict in Ukraine may soon evolve into a war of attrition, while the American oil and gas industry is reaping great financial gains.

Prior to the crisis in Ukraine, Russia sold over half of its oil, 50% of its gas, and 25% of its coal exports. However, Russian energy exports to EU nations dropped dramatically as a result of sanctions placed on the Kremlin.

Moscow’s countermeasures, which included lowering gas supplies to certain EU members and halting them in others, dashed European hopes of increasing their underground gas reserves to 90% capacity by winter.

Due to significant concerns that they might run out of energy over the winter, European leaders approached their longtime ally, the United States, in quest of alternate energy sources.

Hence, Washington had a golden chance to boost the lucrative export of liquefied natural gas (LNG) to Europe, while the European Union has been severely impacted due to the high costs it is forced to pay to import oil and gas from the United States, as LNG transported through the Russian pipeline is far more cost-effective than American LNG transported by LNG supertankers.

The vast majority of this windfall was vital to stimulating the US economy, which in turn helped the American oil and gas sectors flourish. The Energy Information Administration (EIA) estimates that between January and September 2022, the United States garnered $35 billion from the sale of LNG. This number represents a substantial rise from the $8.3 billion the US made during the same period in 2021.

The United States has reaped tremendous financial gains from the crisis in Ukraine, causing its European allies to openly protest that Washington is the conflict’s principal benefactor. In this context, Politico cited a senior European official who spoke on condition of anonymity as stating, “The reality is that if you look closely, you will discover that the sole country that benefits the most from this conflict is the United States, as the Americans sell more oil at higher prices.”

In recent remarks, French President Emmanuel Macron said that it is “absolutely not friendly” for the United States to increase the price of its energy exports to Europe. The German Federal Minister for Economic Affairs and Climate Protection, Robert Habeck, made similar calls for Washington to be honest with the Europeans about the price of its energy exports and to lower it. However, European officials have voiced concerns that the White House’s duplicity is poisoning the political climate that governs relations across the Atlantic.

Officials in the EU have unanimously voiced their indignation, while a White House spokesperson for the National Security Council has placed the whole blame on Russia, stating that Putin is responsible for Europe’s economic woes since he has shut off gas deliveries.

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