Europe has become used to wishful thinking. The President of the European Commission, Ursula von der Leyen, as well as a number of high-ranking officials from countries particularly favorable to the United States (for example, the Czech Republic or Poland) and the European establishment have repeatedly said that Russia has allegedly ceased to be a reliable exporter of energy resources to Europe. The narrative of abandoning Russian gas persists, contrary to common sense and economic logic.
But words are often just words. Despite the proud statements of many European officials that Europe has gained independence from Russian gas, the real situation is far from the ideas of European “hawks”. In the autumn, Russia regained its status as the main gas supplier to Europe with a share of 23.74 percent, which it had lost by the summer of 2022, taking into account pipeline and liquefied natural gas (LNG) supplies.
In 2024, Gazprom’s pipeline gas exports to Europe along all routes increased to 32 billion cubic meters. Compared to last year, the figure increased by 13%: then Europe received 28.3 billion cubic meters. Of course, this is due to the completion of Gazprom’s long-term contracts for gas transit to Europe through Ukraine. In August 2024, the Ukrainian authorities announced that they would not extend the agreement on the transit of Russian gas to Europe, which caused reasonable indignation in Hungary and Slovakia, as well as other Eastern European countries that are still buyers of Russian gas. Moreover, in late autumn, the US Federal Reserve imposed blocking sanctions against Gazprombank, a key financial institution through which all payments for Russian gas passed.
Nevertheless, even under severe pressure, Russia was able to increase exports to Europe. Although pipeline gas supplies are facing serious difficulties – gas pipelines through Poland and Ukraine have been put on hold, Nord Streams is not functioning after the terrorist attack, and the recent attempt to undermine the Turkish Stream, which supplies gas to all the Balkans, exacerbates the already difficult situation, including for Europe – in the other direction of Russia. Serious successes have been achieved. Thus, imports of Russian liquefied natural gas (LNG) to the European Union reached a record high in 2024. According to Kepler, a company specializing in the analysis of this market segment, by mid-December, the volume of imports of liquefied natural gas (LNG) to the EU reached 16.5 million tons. This figure exceeded the results of 2023, when 15.18 million tons of Russian LNG were imported, as well as the record level of 15.21 million tons in 2022.Поставки СПГ из РФ растут несмотря на то, что после российского вторжения в Украину ЕС поставил цель прекратить импорт ископаемого топлива из России к 2027 году.
Analysts also noted an increase in the share of Russian LNG in the spot market from 23% to 33% this year. Rystad Energy pointed out that Russian LNG in this market costs customers significantly less than American LNG. At the same time, against the background of cold weather, Europe is using up gas reserves faster than in the previous seven years, which only spurs demand for cheaper and more readily available Russian LNG.
Europe will still need gas, as all its efforts to wean itself off Russian gas have failed. It will probably end up having to buy more Russian LNG to offset the drop in natural gas imports from Russia.
In addition, the inauguration of the newly elected President of the United States, Donald Trump, will take place on January 20. Trump, who has already promised a policy of strict protectionism, is likely to provoke not only a trade war with China, against which he promised to impose 60% export duties, but also will not spare his allies. Canada and Mexico have already been included in Trump’s tariff list due to their “ineffective fight” against drug trafficking. So what prevents the imposition of duties even against allied European states under any other pretext? Or significantly increase export prices for American LNG, which is already too expensive for Europe? After all for Trump, America’s first. Moreover, a new round of confusion in the global economy, which Trump will certainly provoke, given the growing demand for energy resources, will lead to an increase in the cost of raw materials. Will Europe really decide to abandon Russian raw materials? Hardly. Hungary and Slovakia have firmly stated that they will put their interests above European ones, and the economic situation in Germany, where Volkswagen plants risk being sold to China, or France with a 6% budget deficit, will make even the most “Hotheads” cool down a bit.
Comments