A Europe-Russia Energy Divorce Begins
March 1, 2022
This quick take is part of our Crisis Crossroads series, which highlights timely analysis by CSIS scholars on the evolving situation in Ukraine and its security, economic, energy, and humanitarian effects.
The war in Ukraine will reshape energy markets. The old energy relationship between Europe and Russia is no more—a relationship that survived the Cuban missile crisis, the Soviet invasions of Czechoslovakia and Afghanistan, martial law in Poland, and myriad other shocks that never stopped Europe from buying Russian hydrocarbons. The European willingness to depend on Russia has shrunk, a change most visible in Germany. Within a week, Germany halted the Nord Stream 2 pipeline, announced an investment in two terminals to import liquefied natural gas, and said it would build strategic reserves in gas and coal. Western companies, meanwhile, are abandoning Russia. These changes are monumental.
Europe is also doubling down on the European Green Deal. The multi-decade project to transform the European energy system always had foreign policy overtures. But those benefits are viewed in a new way—the German finance minister spoke of renewable energy as “freedom energy,” a remarkable turn for a country that once saw the gas trade with Russia as a means to build peace. Russia’s prospects to participate in this new energy system look grim right now—Russia risks being shut out of Europe’s energy transformation. Russia may still be an energy superpower, but Europe now wants to cut the period during which this remains true.
And yet, much as Europe and Russia are headed for an energy divorce, they still depend on each other. Most of Russia’s hydrocarbons still go to Europe. Europe cannot live without Russian gas right now. In the fog of war, many previously unimaginable possibilities are possible: a Western embargo of Russian energy; or a cutoff by Russia, preemptive or retaliatory. So while the long-term picture takes shape, what happens in the next five days, five months, and even five years is impossible to state with any certainty.
Nikos Tsafos is the James R. Schlesinger Chair for Energy and Geopolitics with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2022 by the Center for Strategic and International Studies. All rights reserved.