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Yamal liquified natural gas plant in the town of Sabetta, in Arctic Russia. Photo: Vladimir Smirnov/TASS via Getty Images

Gas has loomed large in President Trump’s recent diplomatic dealings: In his meeting with NATO heads of state in Brussels, Trump called Germany “captive” to Russian gas, and in his Helsinki summit with Vladimir Putin, he made the unusual move of fielding regulatory proposals from the Russian president to prevent plummeting prices in the international gas markets.

Why it matters: For better or worse, U.S. foreign policy is contributing to uncertainty among the three countries with the largest gas reserves — Iran, Russia and Qatar — raising alarm among major Asian and European gas importers looking for secure supply sources.

Following the U.S. withdrawal from the Iran nuclear deal, the Trump administration has promised to reimpose energy-sector sanctions on Iran, effectively freezing investment on new developments in the market with the world’s largest gas reserves. A third gas giant, Qatar, waits in vain for a U.S.–brokered end to its economic blockade by neighboring Saudi Arabia and UAE.

The Trump administration’s trade policy has added to the unease in global gas markets. American liquefied natural gas (LNG) could be subject to 25% tariffs from Beijing in the next round of tit-for-tat escalation. That would create a strong headwind for U.S. LNG exporters keen to profit from the world’s fastest-growing LNG importer.

As it is, U.S. LNG developers are already alarmed by the Section 232 tariffs on imported steel and aluminum, which have increased the cost of new domestic LNG projects. Delays in NAFTA talks have also raised questions around cross-border gas pipeline projects, at a time when U.S. producers are desperate to move surging supplies to fast-growing markets south of the border.

Meanwhile, Wednesday’s U.S.–EU trade agreement reportedly includes provisions for Europe to import what Trump claims will be “massive” amounts of U.S. liquified natural gas (LNG).

The bottom line: The U.S. has long been seen as a low-risk source of LNG in the global market, especially since its exports are in the hands of the private sector and somewhat shielded from political interference — a key difference from several rival exporters. Nonetheless, the turbulent foreign policy and trade dealings in Washington could prevent the sector from reaching its full potential, as politics edges further into dynamics that have traditionally been market-led.

Robert Johnston is CEO of Eurasia Group and a senior fellow at the Atlantic Council Global Energy Center.

Go deeper

Senate confirms retired Gen. Lloyd Austin as defense secretary

Photo: Greg Nash-Pool/Getty Images

The Senate voted 93-2 on Friday to confirm retired Gen. Lloyd Austin as secretary of defense. Sens. Mike Lee (R-Utah) and Josh Hawley (R-Mo.) were the sole "no" votes.

Why it matters: Austin is the first Black American to lead the Pentagon and President Biden's second Cabinet nominee to be confirmed.

House will transmit article of impeachment to Senate on Monday, Schumer says

Photo: Drew Angerer/Getty Images

Senate Majority Leader Chuck Schumer (D-N.Y.) announced that the House will deliver the article of impeachment against former President Trump for "incitement of insurrection" on Monday.

Why it matters: The Senate is required to begin the impeachment trial at 1pm the day after the article is transmitted.

Dan Primack, author of Pro Rata
2 hours ago - Politics & Policy

Private equity bets on delayed tax reform in Biden administration

Illustration: Brendan Lynch/Axios

In normal times, private equity would be nervous about Democratic Party control of both the White House and Congress. But in pandemic-consumed 2021, the industry seems sanguine.

Driving the news: Industry executives and lobbyists paid very close attention to Treasury Secretary nominee Janet Yellen's confirmation hearings this week, and came away convinced that tax reform isn't on the near-term agenda.