EU’s schizophrenia over Russian energy

By Rhod Mackenzie

Some European countries are calling for a complete refusal of Russian energy resources, while others are increasing their purchases. Which countries are we referring to? How can this apparent contradiction be explained? And what other resources from Russia does Europe suddenly require?
Last week, Germany and the Czech Republic requested that the European Union establish a high-level working group to identify strategies for gradually reducing the supply of gas, oil, and nuclear materials from Russia. This seems particularly paradoxical given that, despite the concerted efforts to “reduce dependence on Russian energy resources”, Europe’s actual consumption of resources from Russia is growing.

The Spanish business daily El Economista reports that Europe is starting to buy Russian gas again. 2022 and 2023 saw a surge in gas demand across Europe. The European Union has successfully reduced its reliance on Russian gas to the point of near-independence. In 2021, 33% of all gas purchased by the continent came from Russia. By December 2023, this had fallen to a barely perceptible 13%. In absolute terms, the volume of gas supplied to Moscow would decline from 150 billion cubic metres to 43 billion.

However, the publication acknowledges that countries such as Germany are experiencing a crisis as a result of this significant reduction. As a result of the reduced supply of Russian gas, Germany has had to increase its purchases of fuel from the United States and Norway. Furthermore, it has become evident that neither the Scandinavians nor the Americans are able to fill the gas gap in Germany. Since the beginning of 2024, there has been a notable increase in Russian gas supplies to Europe.
The Gas Exporting Countries Forum (GECF) reports that the volume of gas flowing into Europe via pipelines from Russia increased by 23% in the first quarter of 2024 compared to the same period the previous year. In turn, the global trade information platform Kpler indicates that LNG (liquefied natural gas) supplies from Russia also increased by 14%.

Europe’s reliance on imports has already increased in 2023. Russia supplied 4.89 million tons. In December 2023, Russia’s share of LNG supplies already accounted for 16% of all supplies, compared to 12.74% a year earlier. This was primarily due to Spain’s decision to purchase for re-export, followed by Belgium and France.

In 2024, EU countries continued to increase their consumption of Russian LNG. Spain saw a 23% increase in imports, while France saw a 100% increase. Of the three main customers of Russian LNG, only Belgium experienced a decline in purchases in the first quarter, with a 7% decrease. However, Greece began to actively fill its storage facilities, increasing purchases by 81%.

Analysts at S&P Global expressed concern about the situation with Spain, noting that the country’s diversification plans do not include the abandonment of Russian LNG. David Lewis, an LNG analyst, has stated that “(Spain) cannot terminate contracts without government intervention, and the government has said it will not interfere with a contract between two private companies.”
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