The energy landscape is shifting dramatically! Europe's natural gas supply chain is being reshuffled, and the US is taking advantage of the opportunity

Russia’s Exit, Europe’s Energy Landscape Redraws

At the beginning of 2025, the European energy market enters a turning point. Gazprom, the Russian natural gas industry company, officially ceased transporting natural gas to Europe via Ukraine on January 1st, marking the complete dissolution of Europe’s dependence on Russian gas over the past decades. Before the Russia-Ukraine conflict, Russia accounted for 40% of Europe’s natural gas imports; now, this is a thing of the past.

Ukrainian President Zelensky stated that during the ongoing war, no agreements with economic interests for Russia can be approved. Kyiv firmly refused to renew the transit agreement, completely cutting off Moscow’s energy pipelines to Europe through Ukraine. This decision was called a “historic moment” by Ukraine’s Minister of Energy and is also seen as one of Moscow’s biggest economic setbacks.

Market Adjustment in Place, Limited Price Impact

Market reactions to this change have been relatively stable. The EU had prepared well before the termination of Russian transit, with importers proactively arranging alternative solutions, significantly reducing the risk of price volatility. Data shows that from 2021 to 2023, Russia’s share in the EU pipeline natural gas market dropped sharply from 40% to 8%, indicating that Europe had already begun the process of de-Russification.

European energy experts point out that winter supply prospects are relatively optimistic—most regions have mild climates and sufficient reserves. Although Slovakia remains the only EU country receiving Russian gas via Ukraine, it has also deployed alternative supply solutions. While Slovakia warned that the termination of the agreement would push up European market prices, overall market expectations remain relatively restrained.

U.S. Natural Gas: Europe’s New Energy Pillar

In the vacuum left by Russia’s exit, U.S. liquefied natural gas (LNG) has become the biggest beneficiary. Ukraine’s largest private energy company, DTEK, recently confirmed receiving its first batch of LNG from the U.S., approximately 100 million cubic meters. After arriving at Greek ports, this energy was regasified and transported to Ukraine.

What is more notable is the surge in Europe’s reliance on U.S. LNG. In 2023, the EU imported 46% of its LNG from the U.S., nearly doubling the amount compared to 2021. This indicates that Europe has increasingly regarded the U.S. as a primary supply partner in its energy independence process. Besides the U.S., Europe is also seeking natural gas supplies from Qatar, Norway, and other regions, forming a diversified supply pattern.

Outlook for Europe’s Natural Gas Market

The EU has set a goal to completely phase out Russian natural gas imports by 2027. This is not only a response to the geopolitical situation but also a fundamental adjustment of Europe’s energy strategy. Moving from sole reliance on Russian gas to building a multi-source supply system, Europe is advancing its long-term transition toward energy autonomy.

Currently, Europe’s natural gas market is in a stage of reconstruction. Although a supply crisis is unlikely in the short term, seeking stable and diversified energy supplies remains a core challenge for Europe. The significant increase in U.S. LNG supplies has provided some breathing room, but to fully eliminate energy vulnerabilities, corresponding costs will need to be paid.