Global Energy Glut Lowers European Costs and Hurts US Exports

A global glut in liquefied natural gas (LNG) and crude oil is lowering energy costs across Europe and the United Kingdom, narrowing the industrial competitiveness gap with the United States. This surplus is creating a financial windfall for energy-importing nations while reducing rents for major exporters such as Qatar, Norway, and the U.S.

Donald Trump has pushed to expand the role of the United States as the world's largest LNG exporter, but this strategy coincides with rising domestic U.S. gas prices and falling global demand. The Government of China has significantly reduced its reliance on seaborne energy imports by expanding domestic wind and solar capacity, resulting in a total halt of U.S. LNG imports since February.

Adding to the supply pressure, the International Energy Agency projects a structural overhang in oil supply, estimating that oil supply will rise by 5.7 million barrels a day over the current and following year. This surplus is further exacerbated by Saudi Arabia's efforts to regain market share. Meanwhile, Norwegian state-owned driller Equinor continues to earn significant rents from low-cost gas extraction in fields such as Troll, despite the broader market decline.