When the European Union imposed sanctions on Russia two years back following the outbreak of the Ukraine war, one of its main goals was to reduce reliance on Russian energy.
Total failure is all what we can say today.
This plan backfired big time. Instead of weakening Russia, Europe faced a severe energy crisis, while Russia maintained its position as the world’s top gas exporter even last year.
And guess what, EU is back to square one. Having failed to diversify enough, the continent is again facing a massive gas crisis ahead of the brutal winters.
In November, gas prices in Europe rose sharply, reaching their highest levels of the year. Prices hovered around $490 per 1,000 cubic meters,
Why are gas prices increasing so sharply? Well, even Mother Nature is hitting EU hard. According to a report by DW, the weather is cold and winds have been weaker resulting in fall in renewable supply- this has led to more heating being used and increased gas consumption. But the supply remains tight, which translates to increased prices.
It is to be noted that there are also uncertainty about future gas supplies. In mid-November, Russia stopped delivering gas to Austria’s OMV. Additionally, the contract that allows Russian gas to pass through Ukraine is set to expire on January 1, of the coming year. This uncertainty has made European markets nervous, leading to higher prices.
The energy crisis that began two years ago was triggered by Europe’s decision to cut itself off from Russian gas. This pipeline-delivered gas had been both affordable and reliable. Without it, Europe struggled to find alternative energy sources, leading to higher costs and fears of supply shortages. Many experts worry that Europe could face another difficult winter if these issues are not resolved.
Interestingly, despite sanctions and efforts to reduce reliance on Russian gas, Russia still played a major role in Europe’s energy supply last year. In September, Russia became the EU’s largest gas supplier again, providing 23.7% of the region’s gas.
The EU has also increased imports of Russian liquefied natural gas (LNG). Russian LNG still accounts for 18% of the EU’s total gas imports, an increase of almost 5% from the last year. In October, the EU bought 49% of all Russia’s LNG exports and 40% of all its pipeline gas exports. You see, EU hates Russia but can’t live without it.
Globally, Russia remained the leading gas exporter, with net exports reaching 139 billion cubic meters (bcm), as reported by the International Gas Union (IGU).
EU nations like Slovakia and Hungary still receive Russian pipeline gas.
With gas prices going through the roof, EU nations will now feel urgent need to bury the hatchet with Russia. Trump is back in the White House and we can expect the Ukraine war to end soon. Russia can here put this condition that Ukraine must allow Moscow to operate its gas pipelines that run through the country into the rest of Europe. Since Russian gas is cheaper and easily available, EU economies will have no option but to strike deals with the Kremlin. After all, the road to economic revival goes through cheap energy, through energy security and energy stability.
It’s Russian gas only that can Make Europe Great Again.