How a Ukraine Conflict Could Reshape Europe’s Reliance on Russia
More than a third of the natural gas in Europe comes from Russia. Any disruption to the fuel supply could send shock waves across the continent.
Finland
Which E.U. countries import the most Russian gas
Share of country’s natural gas
imports from Russia, 2020
Sweden
None
20%
40%
60%
80%
Estonia
Russia
Latvia
Denmark
Gas exports
Lithuania
Ireland
Netherlands
U.K.
Poland
Germany
Belgium
Arrow width proportional
to country’s total gas imports
from Russia.
Czech Rep.
Lux.
Slovakia
France
Hungary
Romania
Slovenia
Croatia
Italy
Bulgaria
Spain
Portugal
Greece
Cyprus
Which E.U. countries import the most Russian gas
Share of country’s natural gas
imports from Russia, 2020
Finland
Sweden
None
20%
40%
60%
80%
Estonia
Russia
Latvia
Denmark
Lithuania
Gas exports
Poland
Ireland
Netherlands
U.K.
Germany
Czech
Rep.
Arrow width proportional to
country’s total gas imports
from Russia.
France
Hungary
Romania
Slovenia
Italy
Bulgaria
Spain
Greece
Cyprus
Which countries import the most Russian gas
Finland
Sweden
Latvia
Gas imports
from Russia
U.K.
Poland
Germany
France
Hungary
Bulgaria
Italy
Spain
Greece
Share of country’s natural gas imports from Russia, 2020
None
20%
40%
60%
80%
Arrow width proportional to country’s
total gas imports from Russia
UPDATE: Russia invaded Ukraine early Thursday morning. Read live updates ›
Europe relies on Russia’s natural gas to help heat millions of homes, generate electricity and power factories. With Russian troops massed along Ukraine’s border, the continent’s heavy dependence on Russia is limiting its diplomatic options and threatening to throw its energy supplies into turmoil.
If the flow of gas is interrupted, either as collateral damage from warfare or as a negotiating tactic by President Vladimir V. Putin of Russia, experts worry that already high prices in a constantly shifting global market could skyrocket. Businesses may be forced to temporarily close, and if cutoffs persist, households already facing higher utility bills this winter could feel even more pain.
Analysts and industry executives are skeptical that Mr. Putin would cut off gas, in part because of how important gas exports are to his country’s economy. But the tensions come at a pivotal time for many European nations that have turned to natural gas to help them bridge their transitions from fossil fuels to wind, solar and other cleaner sources.
Diplomatic proposals to counter Russia’s buildup center on sanctions that could limit energy trade. That could throw billions in investments and oil and gas contracts into jeopardy, especially for countries, including Germany and Italy, that rely on Russian gas more than others.
How each country’s dependency on Russian gas has changed
Share of total natural gas imports from Russia
Germany
Lithuania
Poland
France
Netherlands
Italy
In 2021, 38 percent of the natural gas used by the European Union came from Russia, according to Bruegel, a research organization. Some countries, like Poland and Lithuania, have been gradually reducing their reliance on Russian gas. For others, the dependency has been steadily growing.
Germany, which is at the center of the diplomatic standoff, is Moscow’s most important customer. The bulk of the gas to Germany flows directly from Russia through a large pipeline in the Baltic Sea known as Nord Stream. A second pipeline, Nord Stream 2, was recently completed at a cost of $11 billion.
Fuel has yet to flow through Nord Stream 2. American lawmakers in recent months have called for blocking its opening, as critics warn that the new pipeline could allow Moscow to wield greater influence over the continent and starve Ukraine of transit fees through its existing pipeline network that are crucial to Kyiv’s economy.
President Biden has said Nord Stream 2 will not go forward if Russia invades Ukraine. But in an indication of how the politics and business of energy are intertwined, the pipeline’s operating company is chaired by a former German chancellor, Gerhard Schröder.
Several large pipelines bring Russian gas into Europe, where it flows through a vast interconnected network. The amount of gas crossing Ukraine has declined sharply over the last decade, though it remains an important route. Other conduits are the Yamal pipeline through Poland and TurkStream, which feeds Turkey but also brings gas into Southern Europe.
If gas does stop flowing, importing countries would need to find other sources. Some of the difference would most likely be made up by bringing in more liquefied natural gas from sources around the globe.
Natural gas pipelines and L.N.G. terminals in Europe
Liquefied natural
gas (LNG) terminal
Natural gas pipeline
LNG terminal
under construction
Major pipeline for
gas from Russia
Germany is among countries building
up its L.N.G. infrastructure to reduce
its dependency on piped natural gas.
Finland
NORD
STREAM
Sweden
NORD
STREAM 2
Esto.
Latv.
Den.
Lith.
YAMAL
Russia
Ireland
UPU
PROGRESS
U.K.
Neth.
Poland
Germany
Belg.
Ukraine
Czech R.
Slov.
SOYUZ
France
Austria
Hun.
Romania
Croatia
Italy
Bulgaria
Spain
TURK-
STREAM
Portugal
Greece
Cyprus
While flows of natural gas vary and have recently fallen, about one-third of Russia’s gas exports to Europe usually go through Ukraine.
Natural gas pipelines
and L.N.G. terminals
in Europe
Natural gas pipeline
Major pipeline for gas from Russia
Liquefied natural gas (L.N.G.) terminal
L.N.G. terminal under construction
Finland
NORD STREAM
PIPELINE
Estonia
Germany is among
countries building up
its L.N.G. infrastructure
to reduce its dependency
on piped natural gas.
Sweden
Latvia
Russia
Den.
Lithuania
NORD
STREAM 2
YAMAL
Rus.
Ireland
Belarus
Netherlands
Poland
Germany
UPU
PROGRESS
Belgium
Ukraine
Lux.
Czech Rep.
SOYUZ
Slovakia
While flows of natural gas vary and
have recently fallen, about one-third
of Russia’s gas exports to Europe
usually go through Ukraine.
Austria
France
Slovenia
Romania
Croatia
TURKSTREAM
Italy
Bulgaria
Spain
BLUE
STREAM
Portugal
Greece
Cyprus
Natural gas pipelines and L.N.G. terminals in Europe
Natural gas pipeline
Major pipeline for gas from Russia
Liquefied natural gas (L.N.G.) terminal
L.N.G. terminal under construction
Finland
NORD STREAM
PIPELINE
Estonia
Germany is among
countries building up
its L.N.G. infrastructure
to reduce its dependency
on piped natural gas.
Sweden
Latvia
Russia
Denmark
NORD
STREAM 2
Lithuania
YAMAL
Russia
UPU
PROGRESS
Ireland
While flows of natural gas vary and
have recently fallen, about one-third
of Russia’s gas exports to Europe
usually go through Ukraine.
Neth.
Germany
Belg.
Ukraine
Czech Rep.
Lux.
SOYUZ
Slovakia
Austria
France
Hungary
Slovenia
Romania
Croatia
TURKSTREAM
Italy
Bulgaria
BLUE
STREAM
Spain
Portugal
Greece
Cyprus
Liquefied natural gas is made by chilling gas to around minus 260 degrees Fahrenheit so that it can be converted into liquid form and loaded more easily onto ships. The great advantage is that it can be transported stably from great distances, including from Australia and the United States — offering viable alternatives for local or regional sources.
In recent months, Europe has been witnessing a kind of dress rehearsal for a cutback in Russian gas as Moscow curtails shipments to Europe in what some analysts and politicians say is an effort to keep prices high. According to the International Energy Agency, Russia cut its gas exports by pipeline to Europe by 23 percent in the last quarter of 2021 compared with the same period a year earlier. At the same time, imports of liquefied gas have been on the rise.
Natural gas imports to Europe by origin
5-day moving averages
500
million cubic meters a day
L.N.G.
400
(Liquefied
natural gas)
Norway
300
Russia
200
100
Algeria
Azerbaijan
0
Libya
2021
2022
500
million cubic meters a day
L.N.G.
400
(Liquefied
natural gas)
Norway
300
Russia
200
100
Algeria
Azerbaijan
0
Libya
2021
2022
500
million cubic meters a day
L.N.G.
400
(Liquefied
natural gas)
Norway
300
Russia
200
100
Algeria
Azerbaijan
0
Libya
2021
2022
In reality, gas markets are far from static, with volumes and direction of flows largely dictated by price. And while the crisis has not yet led to any military action, the threat of conflict has been weighing on markets. Prices in Europe were already high to end the year as limited storage levels raised concerns that there would be enough fuel to last the winter.
While they have since eased from the records hit in December, they are still roughly four times what they were a year ago.
Natural gas price in Europe
Dutch TTF commodity futures contracts
150
euros per megawatt-hour
100
Monday:
80 euros
50
2018-20
avg:
15 euros
’18
’19
’20
’21
’22
150
euros per megawatt-hour
100
Monday:
80 euros
50
2018-20
avg:
15 euros
0
2018
2019
2020
2021
2022
150
euros per megawatt-hour
100
Monday:
80 euros
50
2018-20 avg:
15 euros
0
2018
2019
2020
2021
2022