Russian President Vladimir Putin is confident that Russian gas supplies to Europe could increase again if a US-led deal to end the Ukrainian conflict is signed.
Why can Europe return to Russian gas?
The most important factor is the cheap factor. Although the EU has significantly reduced its dependence on Russian gas, pressures on energy prices are still putting pressure on the region.
After the biggest energy crisis in decades, gas prices in Europe have not yet completely dropped to their previous level.
Many industries in Germany are looking forward to the opportunity to receive Russian gas back because high energy prices are affecting their competitiveness with foreign producers.
Countries that have relied on gas flows since the Soviet era, such as Slovakia, are expressing their desire for Russian gas to return via pipeline systems.
Reasons for optimism
Mr. Putin is optimistic that Europe will buy more Russian gas because there is a possibility of warming up relations between the US and Russia.
The US is looking to cooperate with Gazprom, a Russian state gas company, to restore the Nord Stream pipeline between Russia and Germany. An American investor, Stephen Lynch, could buy the Nord Stream 2 operator if it goes bankrupt, giving the US a profit in the project.
The lifting of sanctions could also help Russia increase liquefied natural gas (LNG) exports to Europe, as Russia still has excess capacity from the Arctic LNG 2 project, which was interrupted by the US ban. President Trump has proposed lifting some sanctions if a peace deal is reached in Ukraine.
Barriers
Bloomberg also pointed out barriers that make it difficult for Russian gas to return to Europe.
First of all, the EU is implementing a plan to completely eliminate Russian energy by 2027, although the official document has been postponed.
Second, many major Gazprom customers, such as Uniper (Germany) and OMV ( Austria), have canceled long-term contracts following arbitration decisions. Several other companies such as Eni (Italy) and Engie (France) are still suing Gazprom and are unlikely to buy back gas before the dispute is resolved.
Third, the infrastructure was damaged. Both Nord Stream 2 undersea pipelines were sabotaged in 2022, and one Nord Stream 2 route was also affected. The remaining route has never been licensed for use by Germany. Although Mr. Putin said that this route can still supply gas, it needs maintenance before operation, and it is unclear how long it will take to complete.
Fourth, the barrier from Poland. Gas via the Yamal- Europe pipeline through Poland could be restored, but the Polish government strongly opposes imports of gas from Russia.
Fifth, while the possibility of a transit through Ukraine could be a mutually beneficial option, previous negotiations between Russian oil giant Gazprom and Naftogaz Ukraine have often been prolonged and complicated.
In addition, it is unclear whether the gas pipeline system in the border area will be damaged by military conflict, especially in Kursk province (Russia), which used to be an important gas transit point.
