In 2022, Russia’s leaders made the decision to halt most of the country’s gas deliveries to the EU, causing prices to rise and allowing Russia to earn more despite lower export volumes. This move had immediate consequences for Europe, which heavily relied on Russian gas for energy. With 40% of its gas coming from Russia in 2021, Europe anticipated inflation and possible blackouts as a result of the gas shortage.
However, two years later, Europe’s gas tanks are fuller than ever, thanks to mild winters and increased imports of liquefied natural gas (LNG) from America. Gazprom, Russia’s state-owned gas giant, is now struggling to make any profits due to these unforeseen circumstances.
Redirecting the 180 billion cubic meters of gas that Russia once sold to Europe was always going to be a challenge. Russia lacks the infrastructure and technology to ship gas to other markets, such as the Nord Stream pipeline to Germany and LNG facilities and tankers. Despite these challenges, gas only made up a small portion of Russia’s overall exports between 2018 and 2023, with oil sales remaining strong despite sanctions.
In the end, Russia’s decision to cut off gas to the EU had unintended consequences that have left Gazprom struggling to stay profitable. Meanwhile, Europe has found alternative sources of gas and managed to keep its tanks full, reducing the impact of Russia’s actions on its energy supply.