Global energy: Meetings in Riyadh between Russia and US weren’t merely about Ukraine

Could a great bargain be lurking just beneath the surface, ready to be struck in the fog of geopolitical manoeuvring? It’s a tantalising notion and one worth delving into amid a media tempest where headlines are ricocheting like bullets in a crowded theatre.

Take, for instance, the curious case of US Treasury Secretary Scott Bessent labelling American tariffs on China as “unsustainable”, only for President Trump to retort with a cryptic promise that tariffs will persist at elevated levels. Meanwhile, news outlet Politico stirred the pot with whispers of the US lifting sanctions on natural gas pipelines from Russia to Germany – Nord Stream 2, that glamorous ghost of energy promises past. Alas, Secretary of State Marco Rubio wasted no time taking to X – by the way, haven’t we all had enough of governance by tweet? – to dismiss this as “a piece of fiction.” The cacophony is such that disentangling the genuine signal from the clamour is akin to finding a needle in a haystack of sensationalism. Let’s attempt to sift through this frenzy and identify the true undercurrents at play.

Back in December, when Pierre Poilievre was sitting pretty with over a 90 per cent shot at bumping Justin Trudeau from his throne – and Mark Carney was just a name floating around as an unshowy banker no one really paid much attention to – our friends over at Doomberg decided to connect a few dots: Carney’s ascension to the prime minister’s office wasn’t just a pipe dream, but a carefully plotted scenario. The real game was the ongoing turf war between Ottawa and Alberta, home to some of the world’s biggest hydrocarbon riches, and how Carney’s rise might just be the catalyst to recalibrate Canada’s energy future.

They laid out the blueprint, and it’s almost spooky how prescient it was: “Here’s how the play is likely to unfold in the weeks and months ahead: Carney will be elected Prime Minister on April 28 by a comfortable margin; [Alberta Premier Danielle] Smith will trigger a constitutional crisis, providing cover for Carney to strike a grand bargain that finally resolves longstanding tensions between the provinces and Ottawa; and large infrastructure permitting reform will fall into place. Protests against these developments will be surprisingly muted, and those who do take to the streets will be largely ignored by the media. The entire effort will be wrapped in a thicket of patriotism, with Trump portrayed as a threat even greater than climate change itself. References to carbon emissions will slowly fade.”

Trump and Carney will quickly strike a deal on tariffs that bolsters Carney’s credibility at just the right moment, cementing his political and economic clout as the nation lurks on the edge of this unfolding saga.

While the world was otherwise occupied with Trump’s tariffs, something else of seismic proportions was quietly unfolding in the shadows: Saudi Arabia and Russia seem to have orchestrated an exit for OPEC from the global energy stage, striking a clandestine deal to boost oil production despite prices that hover uncomfortably below the premium range of over $70 a barrel. The United States is angling for oil at around $50, and, astonishingly, it appears they might just get their wish. Those high-stakes meetings in Riyadh between US and Russian figures weren’t merely about Ukraine—they likely delved into prospective energy landscapes too. With the three titans of hydrocarbon production—Russia, Saudi Arabia and the US – convening, the fate of global energy flows is surely a topic of mutual interest. 

So, what did we learn shortly after Saudi Arabia unveiled plans to ramp up production? They proudly announced the discovery of 14 new oil and gas fields as if they were unveiling a new iPhone. Add to this the diplomatic dance between Russia and the US exploring Arctic energy alliances, and you’ve got a recipe for a potential energy realignment. Factor in the surprising thaw in US-Iran nuclear negotiations and the continuing economic pressure on Venezuela – the nation with the world’s largest oil reserves – and the plot thickens. All signs point to a concerted effort to lower global energy prices, a strategy that likely keeps American oil producers up at night. In this domain, profits hinge not on volume but on price – so the cheaper oil and gas get, the tighter the squeeze on those bottom lines.

Don’t be surprised, however, if the oil industry finds respite through prospective tax cuts. Yet it is becoming increasingly clear that Trump is laser-focused on cheap energy for American consumers, not soaring profits for producers. And when I say “consumers,” make no mistake, it is American consumers he has in mind, not the worldwide populace. A way to curry favour with American energy producers might lie in further opening export markets, particularly with Europe. Trump has taken to lamenting the trade deficit with the EU, and liquefied natural gas (LNG) could be the knight in shining armour to swing the balance. Picture this: the US market remains a welcoming haven for European goods, while the European market becomes – perhaps even exclusively – a lifeline for American energy. This could very well be the tantalising deal the Trump administration is angling to broker.

Thus, one should tread lightly in anticipating a deluge of Russian gas flowing back into Europe anytime soon. It is not necessarily the desires of Brussels or Moscow at play – it’s a more complex game dictated by Washington’s whims. The unfortunate reality of Europe’s energy strategy is this: it can only choose whom it wishes to depend upon, never achieving true independence.