
This article was published by The Energy Mix on Jan. 13, 2025.
By Christopher Bonasia
Three years after Vladimir Putin’s invasion of Ukraine, its gas exports remain a thorny issue, as European countries continue to purchase Russian liquefied natural gas (LNG) amid a winter surge in energy prices.
“The record levels of Russian LNG imports in 2024 are a stark reminder that the European Union must act decisively to close the remaining loopholes in its sanctions regime,” Svitlana Romanko, founder of Ukrainian climate campaign group Razom We Stand, told The Guardian. “We are up to 15 sanctions packages now, and a full ban on Russian LNG imports is urgently needed to stop funding Putin’s war chest.”
The EU reports a significant reduction in Russian gas imports, dropping from 45 per cent of import volume in 2021 to 15 per cent in 2023. However, the proportion rose to 18 per cent in 2024. While the EU has committed to phasing out Russian gas entirely by 2027, it is up to individual countries to make that call, reports the Financial Times.
Despite scaling back, European countries have increasingly turned to Russian LNG, with imports rising 14 per cent in 2024 compared to the previous year, writes the Guardian. “Companies are operating in their own self-interest and buying increasing quantities of gas from the cheapest supplier,” says Vaibhav Raghunandan, a Russia analyst at the Centre for Research on Energy and Clean Air.
Overall, Europe is consuming less Russian gas than before the war. Early in the invasion, Russia sought to weaponize its gas dominance by cutting off exports to Europe unless countries paid in rubles. The EU tried to “counter-weaponize” by cutting imports—an attempt to block off funds that could be used for military operations, writes the Brookings Institution.
Meanwhile, the United States has been Europe’s largest LNG supplier to replace Russia, providing nearly half of what the region used last year. President-elect Donald Trump has tried to arm-twist EU countries into buying even more, threatening tariffs if they don’t comply.
For now, the continuing gas imports give Russia a financial lifeline to sustain its ongoing war—one that the EU has spent billions of dollars on financial, military, and humanitarian aid to resist. And although the Russian LNG imports help stabilize energy prices for European households, they also expose consumers to greater price volatility. On January 1, energy prices surged after Ukraine stopped Russian gas from flowing through its borders to central Europe, tightening supply amid high winter demand.
This year’s colder winter “along with slumping wind and solar power due to calm winds and covered skies… is pushing up natural gas demand and drawing down inventories much faster than last year,” writes Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University.
Ukrainian president Volodymyr Zelensky described the end of Russian gas transit through Ukraine as “one of Moscow’s biggest defeats,” but it has been struggling from Russian attacks on its own energy systems, prompting calls from the International Energy Agency for outside countries to support decentralized options—like wind power—to fortify Ukraine’s energy resilience.
With transport through Ukraine blocked, European access to Russian gas now depends more on shipping LNG, though this option is constrained because of limited transportation infrastructure and because shipped LNG is more expensive.
Upcoming regulations could inadvertently increase the amount of LNG used by Europe. Russian LNG is still allowed to enter Europe and be shipped out again through European ports, with 20 per cent of Russian LNG currently re-exported to other countries. An EU ban passed last June—to take effect this March—is intended to further sanction Russia by stopping the re-exports, but it will still allow imports, which could keep a higher amount of Russian LNG in Europe, says Tagesspiegel Background.
But the coming change in the U.S. presidency could create a major shift in the ongoing energy trade conflict between Europe and Russia. Trump has said he will push for an end to the war, which could remove the EU’s motivation to withhold purchases of Russian fuel, write researchers Michael Bradshaw, professor of global energy at the University of Warwick, and Steve Pye, a professor of energy systems from University College London.
Or, in another possible outcome, Russia’s exclusion from Europe’s energy market could push a Russian “pivot” to Asian energy markets, primarily China, they suggest. “Higher demand from China will not significantly improve prospects for Russia,” and will depend on China’s energy security and climate change strategies. But Russian gas reducing China’s imports from elsewhere could free up other LNG in the global market—like that from the U.S.—to supply Europe.
“Ironically, this could be an outcome that could also ease looming trade frictions between the EU and the incoming U.S. president,” write Bradshaw and Pye.
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