Before the large-scale invasion in February 2022, Russia was a major supplier of natural gas to Europe, providing approximately 40% of its needs. The invasion led to a sharp reduction in these supplies, causing gas prices to soar and contributing to a cost-of-living crisis across the continent. In response, European governments and businesses have been actively seeking alternative energy sources.
Historically, Europe relied heavily on Russian gas transported via pipelines. However, the invasion prompted a shift towards liquefied natural gas (LNG), with countries like Germany quickly establishing floating import terminals to secure alternative supplies. According to Simone Tagliapietra, an energy analyst at the Bruegel think tank, Europe’s gas market is currently well supplied.
Nevertheless, despite efforts to diversify, Russian gas continues to flow into Europe. Austria, for instance, has increased its imports of Russian gas from 80% to 98% over the past two years. Italy, while reducing direct imports, still receives Russian-sourced gas via Austria. Natural gas from Western Siberia flows through pipelines across the Ukrainian border into the European Union, supplying countries such as Austria, Slovakia, and Hungary. Armida van Rijd, a senior fellow at the Royal Institute of International Affairs, noted that while European efforts to reduce dependence on Russian gas are commendable, fully diversifying energy supplies remains a major challenge amid high inflation and a cost-of-living crisis.
As winter approaches, natural gas prices in Europe may rise due to increased demand driven by colder weather. Nighttime temperatures in Europe have already fallen below seasonal norms, suggesting a colder winter ahead and potentially higher energy consumption. This view is supported by the US Energy Information Administration (EIA), which anticipates increased heating demand as temperatures drop.
