The coming made-in-US oil crunch

At a Senate hearing on September 12, Sergio Gor, Donald Trump's nominee for US ambassador to India, said that Washington would push New Delhi to buy more American crude oil, refined products, and LNG as part of ongoing trade talks. This is not new.

- AJAY SRIVASTAVA

For the past two years, Mr Trump and his team have pressed India and other nations to stop buying Russian oil and shift to US barrels.

Energy demands in every deal

Washington has embedded energy-purchase pledges into its recent trade deals. The European Union has promised to buy roughly $750 billion of US oil, gas, and nuclear fuel over three years - about $250 billion annually. Japan has pledged $7 billion a year, mainly LNG. Britain has signed a 10-year gas deal for 50,000 MMBtu a day, starting 2028, roughly five LNG cargoes a year. Vietnam is lining up 9 mtpa of LNG imports from the US by 2030, and Thailand has signed a 20-year contract for 2 mtpa of US LNG.

The supply illusion

But there's a problem. The US is still a net crude importer - the same product it is urging others to buy. Washington wants to block Russian barrels, keep prices low, and somehow become the world's top oil supplier. The math doesn't work.

The 2024 trade data are telling. The US exported $298 billion of petroleum crude and products and imported $246 billion, thanks to big surpluses in refined products and LNG. But in crude oil, it imported $174.4 billion and exported $114.5 billion - leaving a $60 billion deficit. America remains a net crude buyer.