Redazione
A key pipeline connecting Russia to Europe via Ukraine is set to shut down, raising concerns across the continent. However, the European bloc isn’t ready to bid farewell just yet, as winter gas reserves are depleting faster than expected
The European Union may soon face a new energy crisis, with gas prices at risk of rising again, though likely not reaching the levels seen in 2022. A further blow could come from the closure of the last pipeline connecting Russia to the bloc via Ukraine, an event Brussels has been preparing for over the past two years but one for which Europe may still not be fully ready.
Gas prices have already surged by 45% this year, driven by a conflict that continues to escalate rather than move toward resolution. Recent low temperatures have worsened the situation, depleting reserves more quickly due to increased heating demand and reduced output from alternative energy sources, such as wind, which has forced greater reliance on gas for power generation.
Declining reserves
As highlighted in a detailed Bloomberg analysis, the situation could worsen in the coming months. The gas supplies that allowed Europe to fill its reserves in 2024 may not be available next year. “We still have issues with gas supplies,” admitted Markus Krebber, CEO of German utility company RWE AG. “If we truly want to be independent from Russian gas, we need to increase import capacity. We’ll likely see the impact even this winter, as gas storage facilities are emptying quickly with the arrival of colder weather,” he explained.
Pipeline closure
Following the shutdown of Nord Stream, whose flows were halted by Moscow in 2022, European countries have continued to receive Russian hydrocarbons primarily via liquefied natural gas (LNG) shipments, as well as through pipelines. The Urengoy-Pomary-Uzhgorod pipeline transports gas from Russia through Ukraine to Slovakia, where it splits into branches headed toward the Czech Republic and Austria. Italy, along with Hungary, is among the countries that rely on this route for supplies.
Austria has primarily relied on gas supplies delivered through Ukraine, while Russia provides roughly two-thirds of Hungary’s imports. Slovakia receives about three billion cubic meters of gas annually from Gazprom, which meets approximately two-thirds of its energy requirements. The Czech Republic, after nearly eliminating its imports of gas from the East last year, resumed purchases from Moscow in 2024.
In May, Snam, Italy’s national gas pipeline company, reported that Russian gas imports during the previous winter season accounted for less than 2% of Italy’s total supply. On October 31, the network operator announced the successful completion of its storage campaign, reaching 98.5% of available capacity, surpassing the EU average of 95%. As a result, Italy is now positioned to become one of the countries exporting gas to Austria.
Other routes
Before the invasion of Ukraine, Russia was the EU’s primary supplier of pipeline gas, but its market share has plummeted in response to the conflict. The main transit line through Ukraine is expected to shut down by the end of the year, as Kyiv has announced it will not renew the transit contract with Gazprom. Most other Russian gas routes to Europe are already closed, including the Nord Stream and the Yamal-Europe pipeline, which runs through Belarus. The only remaining operational routes are the Blue Stream and TurkStream pipelines to Turkey under the Black Sea, though these have limited capacity.
Prices set to rise
Despite Europe’s efforts to reduce its reliance on Russia, primarily through the increased use of liquefied natural gas (LNG), analysts at Energy Aspects warn that the loss of supply via Ukraine would intensify pressure on the gas market and drive up global prices. Two years ago, Germany enforced rapid and mandatory gas purchases for storage from the global market, paying record prices. To recover part of these costs, the German government introduced a storage levy, which impacted LNG procurement costs for landlocked countries such as Austria, Slovakia, and the Czech Republic.
“The current situation is beginning to resemble that of 2022, when the EU was purchasing gas at any price,” said Arne Lohmann Rasmussen, chief analyst at Copenhagen’s Global Risk Management, noting the likely repercussions. “Once again, energy-intensive economies, led by Germany, will bear the brunt, further hurting an economy already struggling in the automotive, chemical, and machinery sectors,” predicted Ole Hansen, head of commodity strategy at the Danish investment bank Saxo Bank.
