(Reuters) – U.S. President-elect Donald Trump said on Friday that the European Union may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world’s largest economy.

The EU is already buying the lion’s share of U.S. oil and gas exports, according to U.S. government data, and no additional volumes are currently available unless the United States increases output or volumes are re-routed from Asia – another big consumer of U.S. energy.

“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,” Trump said in a post on Truth Social.

“Otherwise, it is TARIFFS all the way!!!,” he added.

The European Commission said it was ready to discuss with the president-elect how to strengthen an already strong relationship, including in the energy sector.

“The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply,” a spokesperson said.

The United States already supplied 47% of the European Union’s LNG imports and 17% of its oil imports in the first quarter of 2024, according to data from EU statistics office Eurostat.

Trump has vowed to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the U.S. for decades.

Trump has repeatedly highlighted the U.S. trade deficit for goods, but not trade as a whole.

The U.S. had a goods trade deficit with the EU of 155.8 billion euros ($161.9 billion) last year. However, in services it had a surplus of 104 billion euros, Eurostat data shows.

Trump, who takes office on Jan. 20, has already pledged hefty tariffs on three of the United States’ largest trading partners – Canada, Mexico and China.

Most European oil refiners and gas firms are private and the governments have no say on where the purchases are coming from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.

The EU has steeply increased purchases of U.S. oil and gas following the block’s decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.

The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids or a fifth of global demand.

exports to Europe stand at over two million bpd representing over a half of U.S. total exports with the rest going to Asia. The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the U.S. government data.

The United States is also the world’s biggest gas producer and consumer with output of over 103 billion cubic feet per day (bcfd).

The U.S. government projects that U.S. exports of liquefied gas (LNG) will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of U.S. LNG exports, with the UK, France, Spain and Germany being the main destinations.

EU exports are dominated by Germany with key goods being cars, machinery and chemicals.

($1 = 0.9623 euros)

Investing.com — President-elect Donald Trump warned that the European Union (EU) must significantly increase its purchases of American oil and gas or face tariffs on European imports.

“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!!!” Trump wrote on his Truth Social platform on Friday.

Having secured a second term in last month’s presidential election, Trump is preparing to reintroduce tariffs as a key element of his economic strategy when he returns to the White House next month.

He has already vowed to raise duties on imports from China, the country with which the US has its largest trade deficit. Furthermore, he has promised new tariffs on allies, including Canada, Mexico, and Europe, as part of an effort to boost American manufacturing.

The US is the largest market for European Union goods, representing nearly 20% of the bloc’s total exports.

The country’s largest trade deficit with the EU is in machinery and vehicles, amounting to 102 billion euros ($106 billion) in 2023. However, in energy trade, the US held a surplus with the EU, valued at 70 billion euros.

As the world’s leading oil producer, the US accounted for 22% of the global oil supply in 2023, according to the US Energy Information Administration. The agency also forecasts record-breaking production in 2024.

Producers are expecting further growth in supply under a Trump administration, which is likely to prioritize deregulation in the energy sector.

The EU has signaled plans to increase its energy imports from the United States in the coming years.

European Commission President Ursula von der Leyen recently stated that replacing Russian liquefied (LNG) with US supplies would be more cost-effective. She also noted that the EU intends to engage and negotiate further on the issue once President-elect Donald Trump assumes office in 2025.

By Paul Carsten

LONDON (Reuters) -Oil prices fell on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down more than 3%.

futures fell by 76 cents, or 1.0%, to $72.12 a barrel by 1117 GMT. U.S. West Texas Intermediate crude futures also eased 76 cents, or 1.1%, to $68.62 per barrel.

Chinese state-owned refiner Sinopec (OTC:) said in its annual energy outlook released on Thursday that China’s crude imports could peak as soon as 2025 and the country’s oil consumption would peak by 2027 as diesel and gasoline demand weaken.

“Benchmark crude prices are in a prolonged consolidation phase as the market heads towards the year-end weighed by uncertainty in oil demand growth,” said Emril Jamil, senior research specialist at LSEG.

He added that OPEC+ would require supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand growth outlook. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, recently cut its growth forecast for 2024 global oil demand for a fifth straight month.

JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day (bpd) in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million bpd in 2025 and OPEC output remaining at current levels.

Meanwhile, the dollar’s climb to near a two-year high also weighed on oil prices, after the U.S. Federal Reserve flagged it would be cautious about cutting interest rates in 2025.

A stronger dollar makes oil more expensive for holders of other currencies, while a slower pace of rate cuts could dampen economic growth and trim oil demand.

U.S. President-elect Donald Trump said on Friday that the European Union may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world’s largest economy.

In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday.

Russia has circumvented the $60 per barrel cap imposed in 2022 using its “shadow fleet” of ships, which the EU and Britain have targeted with further sanctions in recent days.