Conflict in Ukraine: the gas war has put the European economy in great difficulty

The structure for receiving gas via the Nord Stream 1 gas pipeline, in Lubmin, Germany, on July 21, 2022. © Annegret Hilse / Reuters

Text by: Altin Lazaj

3 mins

It has been almost ten months since Russia invaded Ukraine.

The conflict revealed the European Union's heavy dependence on Russian gas.

To respond to European sanctions, Vladimir Putin used the weapon of gas.

He sharply reduced exports by gas pipeline, which put the European Union in great energy difficulty.


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The European Union suffered a veritable energy shock, resulting in soaring energy prices.

The EU had no choice but to engage in a new energy geopolitics.

To compensate for the drop in Russian gas supplies, the EU has essentially turned to LNG, liquefied natural gas, which is easier to implement than the development of new gas pipelines.

Its main supplier is the United States.

It has also increased its gas pipeline supplies from Norway and Azerbaijan.

►Also read: 

The European Union agrees on a gas price cap


But that was not enough to relax prices, because there are no significant LNG capacities on the markets.

New extraction projects in countries such as Qatar, Australia and the United States will begin production in about three years

 ,” said Olivier Appert, advisor to the Energy Center of the French Institute for International Relations ( Ifri).

For Emma Stokking, project manager at Shift Project, a think tank which works in favor of a carbon-free economy, " 

the European Union must also prepare for severe competition with the countries of Asia, in particular China, enormous gas importer


Indeed, last month, Qatar signed a 27-year liquefied natural gas deal with China, the longest ever in the LNG industry.

European industry in deep trouble

This surge in gas prices is having a definite impact on European businesses


especially those that consume the most energy, foremost among which are the steel and chemical sectors



These companies pay up to four times more for energy than their competitors, for example, Americans.

And that creates unfair competition.

This energy crisis could push companies to relocate to countries where energy prices are lower than in Europe

 ,” said Damien Ernst


economist at the University of Liège in Belgium.

For several experts, the European Union is now paying for the errors of its energy policy.


Europe has not geographically diversified its supplies.

It was very dependent on Russian gas, nor did it diversify enough in the type of supply

 ,” said Bertrand Candelon, professor and energy specialist at the Catholic University of Louvain in Belgium.

Uncertain energy future for at least the next two to three years, preservation of its industry or compliance with climate objectives.

The equation will be difficult to solve for the European Union.

►Also read: Ukraine: the multiplication of Russian attacks increasingly threatens the energy system


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