ExxonMobil (NYSE:XOM) expects the European Union to sign multi-decade contracts for U.S. liquefied natural gas as part of a $750 billion pledge to buy American energy by 2028, underlining Europe’s long-term focus on fossil fuels.
The United States and the European Union (EU) reached a trade agreement on July 27 in which the EU pledged to purchase $750 billion worth of energy products, including natural gas, oil, and nuclear fuel and reactors, from the United States over the next three years.
Peter Clarke, Exxon’s senior vice president of LNG, told the Financial Times at the Gastech conference in Milan that Europe has become the most critical market for U.S. exports and urged the bloc to embrace long-term contracting.
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Benzinga reached out to Exxon’s investor relations for comment on the story and is awaiting a response.
Until recently, EU states avoided long-term fossil fuel contracts to safeguard climate goals. Clarke noted that Europe’s LNG imports rose 20% year-over-year in 2024, with the U.S. supplying 55% of the total.
Under current trends, according to Columbia University’s Anne-Sophie Corbeau, U.S. cargoes could provide 75% of Europe’s LNG imports.
The EU’s pivot follows U.S. pressure. Energy Secretary Chris Wright urged Europe to halt Russian gas purchases to support tougher American sanctions on Moscow.
Exxon is preparing for the surge with its Golden Pass terminal in Texas, developed with QatarEnergy, which will launch next year and eventually export over 15 million tonnes annually. Clarke emphasized that Exxon already sells 80% of its LNG under long-term contracts and called Europe’s expanding LNG infrastructure a “logical” reason to lock in supply.
However, recent reports also flagged ExxonMobil’s challenges in Europe as high energy costs, strict EU regulations, and cheap Chinese exports squeeze margins, pushing the company to weigh up to $1 billion in chemical divestments after already selling French assets, while also clashing with Brussels over policies it says deter investment.
Exxon stock gained close to 3% year-to-date compared to the S&P 500 Energy Sector Index’s 2% returns due to declining investor enthusiasm in fossil fuels, the long-term shift towards renewable energy, lower oil and gas prices, reduced refining margins, and overall weak economic conditions.
Price Action: At last check Wednesday, XOM shares were trading higher by 0.17% to $110.84 premarket.
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