US President Donald Trump celebrated on Truth Social what he called the “biggest oil deal in history” – a 100-year concession on 17 oil fields in Venezuela that would secure 65 billion barrels of oil. Around the same time, QatarEnergy informed Edison, one of its biggest European customers, that force majeure on its liquefied natural gas (LNG) deliveries would continue until early November. Five more cargoes were cancelled, taking the total to 29, or about 3.8 billion cubic metres of gas.
The contract has run since 2009 and normally covers roughly a tenth of Italy’s annual consumption. Edison has kept supplying its customers by finding replacement cargoes elsewhere, including in the US. For decades, the bargain between Washington and the Gulf was clear.
The US protected the region and kept its sea lanes open; Gulf producers supplied the energy on which the global economy depended and settled their sales in dollars to benefit the US economy. That bargain has been turned on its head. America no longer simply protects Gulf energy.
It competes with it, and increasingly profits when the Gulf cannot deliver due to insecurity. Six months of war have reportedly impacted Qatar’s LNG exports significantly. Other Gulf countries like Kuwait, Saudi Arabia and the UAE have seen a substantial drop in oil exports as well.
Meanwhile, US oil and gas have moved into the space left behind, with US energy giants raking in record-high profits. It is important here to distinguish between the US as a government and the dense network of private interests that operates around it. Washington wants strategic leverage over Iran and continued influence over the Gulf states.
Energy companies want access to reserves, favourable regulation, profitable prices and new customers. Trump brings the two together under the banner of energy dominance. State power opens the door; private capital walks through it.
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