Gas Wars: How Russia’s Gas Cutoff Threatened Europe’s Energy Security and Ultimately Led to its Resilience

In 2022, Russia made the decision to halt most of its gas deliveries to the EU, hoping it would benefit financially. Although prices of gas immediately increased, allowing Russia to earn more money despite lower export volumes, Europe faced challenges. The sudden gas shortage forced Europe, which relied on Russia for 40% of its gas in 2021, to prepare for potential inflation and blackouts.

Two years later, Europe’s gas tanks are fuller than ever thanks to mild winters and significant imports of liquefied natural gas (LNG) from America. Despite the initial impact of Russia’s gas cutoff, Gazprom, Russia’s state-owned gas company, has struggled to make any profits. Despite facing challenges in redirecting the 180bn cubic metres of gas it once sold to Europe, representing 80% of its total gas exports in 2021.

Russia lacks the infrastructure to easily shift its gas exports to other markets as there is no equivalent to Nord Stream, a pipeline to Germany that allowed for easy gas delivery. Additionally, Russia does not have the necessary facilities for LNG production or specialized tankers needed for transportation. Despite these obstacles, Russia had only experienced minor setbacks until recently when from 2018 to 2023 only 20% of total revenue from hydrocarbon exports came from gas and the country continued selling oil at a lucrative price despite facing sanctions.