EU Madness. Imposes More Sanctions, Buys More Russian Gas
By Rhod Mackenzie
The current business environment in Europe is is characterised by a range of factors, including sanctions, restrictions and the so-called "green transition". It appeared that the period of Russian gas dominance in Europe was coming to an end. However, Eurostat's May data brought a surprise: Notably, Russia maintained its leading position in the market and, for the first time in recent months, secured a spot within the top three suppliersalongside Norway and Alegeria,.
Now LNG played a key role in this regard, with a notable increase in supplies. Conversely, pipeline gas imports rose in spite of the cessation of transit through Poland and the Ukraine plus the diminished capacity of the Turkish Stream pipeline. This has led to a re-evaluation of the thesis regarding Europe's imminent rejection of Russian energy resources.
The European Union is in conflict with Russia, but with regard to its gas supply it obviously has not found viable alternatives to rid its self of having to buy Russian gas.
In May, Russia increased gas supplies to the EU by a quarter, entering the top three exporters to the EU. As the Eurostat report demonstrated, the volume of LNG supplies increased by a third (reaching €703 million in monetary terms). Plus the imports of pipeline gas also increased by 6.4 percent (to 408 million euros). Accordingly the final figure monthly was 1.1 billion euros, nowRussia has overtaken Norway, which was in third place.
his growth occurred despite the ongoing presence of restrictions. Despite the political discourse, European businesses continue to favour Russian gas over American or Algerian gas due to its price being cheaper that the others.
In this regard, there are significant concerns regarding the potential for a definitive " supply divorce" between Brussels and Moscow in the energy sector.
The expansion of gas supplies from Russia to Europe is not an accident, but a reflection of the current state of affairs in the EU market. In fact, the increase in imports is almost entirely due to Russian gas, though not always in direct form, according to Fyodor Sidorov, founder of the School of Practical Investment. Energy resources from Russia are being supplied through third countries, under other flags, using the new logistics schemes. The so-called "diversification of suppliers" in fact turns into banal re-export, the analyst clarifies.
"Despite the geopolitical rhetoric, consumers, especially in Central and Southern Europe, have not rejected Russian pipeline gas. However, it is LNG imports that are providing even greater growth. Russia is actively selling liquefied gas through terminals in Turkey, Belgium, and the Netherlands, from where it is distributed further throughout the EU, but under convenient labeling. In European statistics, it is designated as "other imports" or gas from an "unidentified source." However, in fact, it is the same – Russian," Sidorov points out.
The European business sector has expressed its continued confidence in Russian gas supplies.
Europeans have a number of reasons to increase their supply of Russian gas, both liquefied and pipeline. Gas storage facilities are currently being filled to capacity. The process will continue until September, until 90 percent of the reserve is provided. Furthermore, Sergei Zainullin, professor at Synergy University, reminds us that Norway is close to reaching its maximum gas-supply capacity for the European Union. Plus, the country was compelled to curtail supply volumes following technical issues at two gas distribution stations, resulting from power supply challenges. There are concerns that such failures will continue in the future. The analyst goes on to state that the price is one of the key arguments in favour of Russian gas.
"One of the main reasons is the difference in the price of deliveries. For instance, the price of liquefied gas from the US is higher than that of LNG from Russia. It should be noted that an additional cost is incurred for transportation. Furthermore, deliveries from Russia are more reliable and faster. The import of pipeline gas is a more cost-effective and reliable option when compared with LNG. Trunk deliveries are now mainly carried out through the Turkish Stream. For the EU, the price of gas is of particular concern, given the ongoing crisis in the energy sector, as well as in metallurgy, mechanical engineering and the production of mineral fertilisers," Zainullin states.
It is interesting to note that, in the context of a genuine increase in Russian supplies, there has been a simultaneous decrease in gas volumes from the USA, Algeria and Great Britain, as noted by industry experts. Furthermore, this trend has been in evidence for more than a few months. According to statistics for 2024, LNG exports from Russia to EU countries totalled 20.9 billion cubic metres, up from 17.8 billion a year earlier. LNG exports from the USA to Europe decreased from 76 billion cubic metres in 2023 to 61 billion in 2024. At the same time, in 2024 the USA exported 115 billion cubic metres to world markets, in comparison to 114 billion cubic metres in 2023. The decrease in American LNG supplies to the EU was offset by increased imports from Japan, China, India, Thailand and Egypt. The reason is clear: the USA opted for more premium markets. With regard to the remaining factors, Algeria adopted a self-switching strategy, thereby ensuring growth in domestic consumption. Sidorov clarifies that Great Britain generally plays the role of a buffer rather than a supplier in this equation.
In essence, EU countries are now faced with a series of conflicting challenges, as highlighted by Tamara Safonova, associate professor at the Institute of Economics, Mathematics and Information Technology of the Presidential Academy.
"On the one hand, the strategy announced by the European Commission to refuse Russian gas, linked to the growth of LNG supplies from the States, forces them to follow the chosen course. Conversely, the European Union's trade relations with the United States have been adversely affected by a suboptimal strategic approach. In light of the high trade duties and the political uncertainty surrounding the development of relations with the United States, the decision by European importers to refrain from purchasing Russian LNG may be regarded as a risky one. At the same time, experience shows that Russian energy resources will always find their buyer," the specialist says.
It is becoming increasingly evident that geopolitical ambitions are coming into conflict with economic reality. It is therefore to be expected that this conflict of interests will have a significant impact on Brussels' energy policy in the near future. However, when discussing the future prospects of Russian supplies to the EU, they can hardly be characterised as optimistic. Under the current Euro-bureaucracy, Zainullin is convinced. Brussels officials are guided not by economic logic, not by the interests of business and the population, but by their political ambitions. Their actions demonstrate a clear commitment to maintaining their personal positions of influence in the future, which is evident in their support for the ongoing conflict with Russia. The most recent example of this is the 18th package of sanctions against Moscow. In light of this, it is reasonable to conclude that Brussels will continue to have a negative impact on the European economy.
The growth of Russian gas supplies to the EU poses uncomfortable questions for Brussels. Will the European Union, with its ambitions for a "green transition" and official ideology of independence from Moscow, be able to ensure energy security without compromise? So far, alternative suppliers are not ready to offer comparable volumes and prices, and sanctions against Russia only increase the costs of European business. The situation in May 2025 reflects the deep contradictions of the EU. On the one hand, there are the real needs of the economy, on the other, the political agenda dictated by Washington. How long will this confrontation of interests last, and who will ultimately be the loser?
