With over half of new global LNG supply coming from the US, an impending oversupply will force US export facilities to operate at significantly lower utilization rates. This transforms the US from a simple high-growth exporter into a flexible, market-balancing swing producer, a role it was not designed for.

The European Union's phase-out of Russian gas is not absolute. Legacy pipeline contracts to Hungary and Slovakia are expected to be exempt. Furthermore, the anticipated loss of Russian LNG supply is projected to be fully absorbed by new global LNG capacity, resulting in a muted impact on prices.

China's renewed commitment to the previously stalled Power of Siberia 2 gas pipeline is a direct geopolitical response to the U.S. using trade and energy as weapons. This move signals a strategic pivot to reduce its energy dependency on the Western Hemisphere amid escalating trade tensions.

Russia has dramatically shifted its oil trade away from the U.S. dollar, with only 5% of exports now settled in USD, down from 55% in 2022. While this circumvents direct financial sanctions, Russia remains vulnerable as key logistics like freight and insurance are still dollar-linked, increasing costs and complexity.

Recognizing Russia's high tolerance for military casualties, Ukraine has shifted its strategy to asymmetric economic warfare. By systematically using long-range drones to attack Russian oil refineries and tankers, Ukraine aims to inflict financial pain where the human cost of war has failed to be a deterrent, creating what they call "the real sanctions."

The primary impact of U.S. sanctions on Russian oil is not a reduction in supply but a compression of profit margins. Russia is forced to offer deeper discounts, estimated at $3-$5 per barrel below pre-sanction levels, to compensate buyers for increased logistical and financial risks, ensuring export flows remain stable.

Despite his stated goal of lowering oil prices, President Trump's aggressive sanctions on Venezuela, Iran, and Russia have removed significant supply from the market. This creates logistical bottlenecks and "oil on water" buildups, effectively tightening the market and keeping prices higher than they would be otherwise.

For a country dependent on a powerful neighbor like the U.S., the path to a fairer relationship is creating leverage. This is achieved by developing independent infrastructure, like pipelines and LNG terminals, to sell resources to other world markets. With viable alternatives, the country can negotiate from a position of strength, not desperation.

U.S. foreign policy actions against Venezuela and Iran are not primarily about democracy but are strategic moves to disrupt the flow of cheap, sanctioned oil to China. By controlling these sources, the U.S. can directly attack a key adversary's economic and military engine.