The EU’s suicide by a thousand sanctions continues unabated. Apparently unsatisfied with the economic and industrial fallout it has already inflicted on Europe over the past three years, the European Commission unveiled earlier this month a new plan to eliminate all Russian energy imports within two years — including gas, liquefied natural gas, oil and enriched uranium for nuclear power plants.
As part of its updated REPowerEU roadmap, the Commission pledged to ban spot market gas imports from Russia — including both existing and new contracts, which currently account for a third of EU gas purchases — by the end of 2025. It also proposed banning all long-term Russian energy contracts by 2027.
Prior to the war in Ukraine, Russia supplied the bulk of the EU’s gas via pipelines. Since then, the EU has slashed Russia’s share of its gas imports from 45% in 2021 to 19% in 2024, with a further decline to 13% projected for 2025. Still, Russia remains the EU’s third-largest gas supplier after Norway and Algeria. To fill the gap, Europe has turned to liquefied natural gas, or LNG, whose share in total gas imports has risen from 20% to 50%. Nearly half of that comes from the United States.
The problem is that LNG is far more expensive and volatile than pipeline gas. While pipeline imports are typically secured through long-term contracts, LNG prices are tied to the global spot market, making them vulnerable to financial speculation and geopolitical shocks — resulting in higher costs and greater uncertainty.
Ironically, while reducing pipeline imports from Russia, the EU has been increasing its purchases of Russian LNG. In the first four months of 2025 alone, Russian LNG deliveries to Europe jumped 12% year-on-year. Why? Partly because a full and immediate cut-off was never feasible; moreover, countries like Hungary and Slovakia explicitly refused to swap cheap Russian gas for costly US LNG. But this was also for legal reasons: many European companies remain locked into long-term “take-or-pay” contracts with Russian suppliers. Under these agreements — often signed before 2022 — buyers must pay for contracted volumes whether they receive the gas or not. This makes continued imports, even at higher prices, a rational choice.
“Ironically, while reducing pipeline imports from Russia, the EU has been increasing its purchases of Russian LNG.”
France, Spain, the Netherlands, Belgium and Italy are currently the largest importers of Russian LNG. Once regasified — that is to say, converted back into natural gas — that gas enters the European grid and ultimately supplies other countries too, such as Germany. Meanwhile, Russian pipeline gas still flows into Europe — and, surprisingly, Ukraine as well — via the TurkStream pipeline, transiting through Turkey to Bulgaria, Serbia, and Hungary, even as other major routes (Yamal-Europe, Nord Stream, Ukraine) have shut down.
But Brussels now wants to put an end to all of this. “Last year we still paid €23 billion to Russia for our energy imports,” EU Energy Commissioner Dan Jørgensen stated. “We do not wish to import one single molecule in the future. For our own security and our solidarity with Ukraine.” Commission President Ursula von der Leyen added: “Now is the time for Europe to completely sever its energy ties with an unreliable supplier. The energy resources that reach our continent must not finance the war against Ukraine.”
The EU has also announced a tough stance toward Hungary and Slovakia, which still import 80% of their oil from Moscow, having been exempted from the sixth sanctions package that banned seaborne imports of Russian crude from the end of 2022 and Russian refined petroleum products from February 2023. They will be required to submit plans to phase out remaining imports by 2027. The Commission is also exploring ways to let companies invoke “force majeure” to exit Russian gas contracts without incurring penalties.
Finally, Brussels is also considering a ban on new energy contracts with Russia and fresh sanctions on existing imports. But such measures would almost certainly face vetoes from Hungary and Slovakia. As Hungarian Foreign Minister Péter Szijjártó put it: “The EU Commission’s politically motivated plan to ban Russian energy is a serious mistake. It threatens energy security, drives up prices and violates sovereignty.” It’s hard to disagree.
Indeed, the higher cost of imported LNG — particularly US LNG — has deeply affected European households and industries. The recent Draghi report confirmed that high energy prices are a major factor in Europe’s declining competitiveness. EU firms now pay two to three times more for electricity and four to five times more for gas than their US counterparts. The consequences have been brutal: three consecutive years of falling industrial output and stagnation across the EU, and outright deindustrialisation across much of Western Europe — especially Germany.
Even though Germany, like other countries, was undoubtedly grappling with pre-existing challenges, it’s clear that energy costs are now the single greatest threat to German and European industry. Many firms have begun relocating production abroad. Major chemical groups are reportedly preparing to exit Europe entirely. One report noted that “these shifts come at a time when Europe’s energy costs have remained exceptionally high for nearly three years. The chemical sector — which accounts for 5-7% of EU manufacturing output and employs 1.2 million people — is under extraordinary pressure. The European Chemical Industry Council has warned of the planned closure of more than 11 million tons of production capacity across 21 major sites, and has called for urgent action”.
Brussels, however, isn’t listening. Indeed, a full EU ban on Russian gas would likely deliver the coup de grâce to Europe’s already flailing industrial base. Not only would Europe be forced to import even larger volumes of higher-priced LNG — primarily from the US — but, as Russia redirects its LNG to more distant markets, transport costs will rise, pushing up already volatile global gas prices and making imports to the EU even more expensive.
So what’s the logic behind this seemingly suicidal policy? The official argument — that Russian energy “funds Putin’s war machine” — is weak. Russia pays its soldiers and builds its weapons in roubles, not foreign currency. Whether it sells gas to Europe, China or India makes little difference to Russia. One can only assume that the bureaucrats in Brussels understand this — which suggests that the EU Commission’s latest move is less about weakening Russia’s capacity to wage war in Ukraine, and more about pursuing other objectives. Among them, I would suggest, is the desire to pre-empt any future normalisation of EU-Russia relations.
This was made clear by the new German Chancellor Friedrich Merz, who vowed to do “everything” to ensure the Nord Stream 2 pipeline — which suffered an underwater bombing sabotage in 2022, reportedly at the hands of a rogue Ukrainian crew — never reopens. Von der Leyen even mentioned Nord Stream as part of the “new package of sanctions” her team was working on. According to the Financial Times, discussions in Berlin and Brussels about preventing any revival of Nord Stream were triggered by news of Russian and US business interests exploring options to resume the pipeline’s operations.
Merz’s decision to endorse a permanent ban on Nord Stream is not only economically senseless — it also effectively legitimises the worst act of industrial sabotage in European history, an event still shrouded in mystery, especially concerning potential foreknowledge of the attack by the German government and its allies. Moreover, it shows a clear disregard for the growing public support within Germany for restoring Russian gas supplies. A recent poll found that 49% of residents in Mecklenburg-Vorpommern, where the pipeline ends, support resuming Russian gas imports. Meanwhile, the AfD, now polling over 20% nationally, has called for Nord Stream to be reopened — a position increasingly shared by business leaders and members of both the CDU and the Social Democrats.
It’s easy to see why: reopening the pipeline makes economic and strategic sense. Russian gas is cheaper, more stable and less environmentally damaging than American LNG, which is produced through high-emission fracking and shipped halfway around the world. The usual counter-argument to this is that Nord Stream created “an irresponsible dependency on Russian gas”. But as one German analyst pointed out, for a long time, first the Soviet Union and then Russia continued to supply energy to Germany despite several geopolitical crises. This continued even when the West unleashed an economic war accompanied by aggressive rhetoric. And even after the delivery of German weapons to Ukraine and then the terrorist attack on Nord Stream, the Russian side repeatedly stated that it was up to the German side whether to resume gas supplies or not.
Yet German and EU leaders remain the staunchest opponents of re-engagement. Why? Partly due to their deeply entrenched hostility towards Russia. But there are also deeper geopolitical dynamics at play. The global LNG market is supply-constrained. Few countries have excess capacity. The United States — currently expanding its LNG export infrastructure — is uniquely positioned to profit. Trump has made LNG central to his trade policy, pressing the EU to buy more as a way to narrow the trade imbalance. This makes a mockery of the EU’s talk of “strategic autonomy”. Publicly defiant of Trump, EU leaders are quietly implementing his energy demands — even if it accelerates Europe’s economic decline.
As one German commentator observed: “The planned ban on Russian gas imports has little to do with the war in Ukraine — and everything to do with the American trade war. The EU is capitulating to Trump. The cost of that capitulation will be devastating, especially for Germany.” And let’s not forget the climate hypocrisy of EU leaders. US LNG has a far higher carbon footprint than Russian pipeline gas — due to both its long-distance transport and its fracking-based extraction. Yet ironically it is the German Greens, the self-proclaimed environmentalists, who are most opposed to restoring pipeline flows.
Ultimately, it should be clear that resuming Russian gas imports makes sense on every level: it is cheaper, more reliable, environmentally cleaner than LNG, and it would also help stabilise geopolitical relations with Moscow. Which is precisely why it’s no surprise that EU leaders are doing the exact opposite: deepening dependence on more expensive, more volatile, and more polluting LNG from across the globe, accelerating Europe’s deindustrialisation and fanning the flames of confrontation with Russia.
