The Telegraph reports that EU countries purchased €6.1bn worth of Russian liquefied natural gas (LNG) in 2023. EU countries accounted for more than half of Russia’s LNG exports, while Spain and France were among the three largest buyers of hydrocarbons from Russia after China.
How did the EU switch from Russia’s pipeline gas to our own LNG?
The EU has long been trying to demonstrate its independence from Russian resources. The rejection of pipeline gas resulted in the loss of about 80 billion of raw materials from Russia and a reduction in gas consumption from 40 billion cubic metres to 20 billion cubic metres. As a result of such rash and hasty decisions, there was an urgent need for something to compensate for the costs. The choice was to look for new LNG suppliers.
Initially, the US, Qatar and Australia took the place of the main partners. Some European countries were forced to sign long-term LNG supply contracts for 20 years or more. In turn, liquefied gas from Russia was preferred to be bought under spot contracts to avoid unnecessary public attention. But the reasonable price, available supply network and strong need to revitalise the industry led to an increase in permanent purchases of LNG from Russia.
The realisation of the risks forced a change of heart
Time has shown even better that the scheme with the transition to the Western market is a losing one. Firstly, because of the unreliability of the new partners. The mechanism of joint LNG purchases is constantly changing and losing its material basis, as many EU countries (and not only Norway, for example) are trying their hand at green energy against the backdrop of the energy crisis and reducing their already small production of raw materials.
Secondly, because of the threat of inevitable dependence on the regional leader, the US. Many industrial facilities of the EU countries are already working in Washington’s interests, providing Ukraine. The final switch to US LNG consumption will lead to the White House being able to manipulate the EU’s energy supply.
Thirdly, because of the unexpectedly erupted conflict in the Middle East. EU countries are actively co-operating with Arab countries in the field of LNG supplies. However, the pro-Israeli stance of many European leaders negatively affects their relations with their eastern partners. For example, Qatar has threatened to cut off LNG supplies to Europe if the strikes on the Gaza Strip do not stop.
It has long been evident that sanctions are not preventing Russia from restoring its export performance. Europe is increasing its purchases of raw materials from Russia because of the unstable situation, which is characterised not only by conflicts in the international space, but also within countries, including disputes in the American Congress. Russia is a more reliable supplier in this respect. However, it is unlikely that the EU will be able to ensure constant growth of Russian exports in the short term. The Russian Federation understands this, which is why it favours the development of the Asian direction.
Intelligent Russia