Europe Between Russian Gas and Alternatives: Challenges of Transition and Future Strategies

2025.03.04 - 11:38
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 At the beginning of the new year, Russian gas supplies to Europe via Ukraine came to a halt following the expiration of the five-year transit agreement between Moscow and Kyiv. This development marks a significant shift in the European energy market, which has historically relied heavily on Russian gas.

The European Context
Despite the disruption, European countries had prepared in advance to mitigate any potential consequences by securing alternative supplies. The European Commission confirmed that the region’s gas infrastructure is capable of handling imports from non-Russian sources, thanks to recent advancements, including expanded liquefied natural gas (LNG) import capacity.

Decline in Russian Gas Imports
Russian natural gas imports to Europe have sharply declined in recent years. In the third quarter of 2024, Russian gas accounted for just 20% of the EU’s total pipeline gas imports, down from 22% in 2022. Meanwhile, Russian LNG saw an increase, making up 20% of imports, compared to just 10% the previous year.

On the other hand, Russian pipeline gas deliveries dropped to only 8% of the EU’s total imports in 2023, a dramatic decrease from more than 40% in 2021. This shift is largely attributed to the EU’s efforts to diversify its gas sources, increasing imports from suppliers such as Norway and the United States.

Europe’s Alternatives
To compensate for the decline in Russian supplies, the EU ramped up LNG imports, particularly from the United States, which became the largest supplier, accounting for 35% of Europe’s total gas imports in 2024. Norway also played a crucial role, providing 30.3% of total imports. Additionally, North African countries and Qatar helped fill the gap left by reduced Russian deliveries.

Impact of Supply Disruptions
The halt of Russian gas transit through Ukraine has raised economic concerns in some European countries. For instance, Slovakia warned of significant financial losses due to lost transit revenues and higher import costs. However, the European Commission reassured that the EU is well-prepared to handle potential challenges.

Declining European Gas Demand
In 2023, the EU’s natural gas demand fell by 7.1%, reducing reliance on Russian supplies. Portugal, Austria, and the Czech Republic saw the most significant declines in gas consumption, whereas Finland, Sweden, and Poland experienced notable increases.

The Future of Russian Gas in Europe
With the transit agreement between Moscow and Kyiv unlikely to be renewed in 2025, questions arise regarding the future of Russian gas in Europe. Possible alternatives include using the TurkStream pipeline or striking deals to transfer gas ownership to European companies.

Geopolitical Challenges
Geopolitical tensions continue to shape the energy market. Europe aims to eliminate its dependence on Russian gas entirely by 2027, while Russia is strengthening its energy ties with other markets, particularly China. Meanwhile, the United States remains the biggest beneficiary of Europe’s growing demand for non-Russian gas.

Conclusion
The suspension of Russian gas supplies through Ukraine marks a historic shift in Europe’s energy landscape. Despite the challenges, Europe has successfully reduced its dependence on Russian gas by diversifying its energy sources and enhancing its infrastructure resilience. As geopolitical dynamics continue to evolve, the future of Russian gas in Europe remains uncertain, with further transformations expected in the coming years.

 

 

 

 

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