How Europe Became So Dependent on Putin for Its Gas

Russian gas has been attractive to Europe because it was easy to transport and almost always available. Its importance grew in recent years as some countries moved to end coal and nuclear power generation and production from their own gas fields declined. Russian state-controlled company Gazprom was supplying about a third of all gas consumed in Europe, until the war in Ukraine disrupted supplies and underscored the risk of overdependence on one energy provider.

After Russia invaded Ukraine, the European Union drew up a plan to cut gas imports from Russia by two-thirds by the end of 2022. Russia, after suffering punishing sanctions, hit back, with President Vladimir Putin signing a decree demanding that all buyers from “unfriendly” countries pay in rubles starting from April. They would have to open special accounts with Russia’s Gazprombank JSC, in foreign currency and rubles, to handle their payments. Buyers in Poland, Bulgaria, Denmark, Finland and the Netherlands refused to abide by the new terms and had their gas cut off. Later, Russia also slashed supplies via its biggest pipeline to the continent, cutting shipments even to those who found workarounds to the new payment order. As a result, customers in Germany, Italy, France and Austria didn’t get all the gas they asked for. In July, EU energy ministers reached a political agreement to cut their gas use by 15% through the winter of 2022/23. While the target was voluntary, it could become mandatory if an emergency arises.