Europe’s energy crisis, triggered by its long-standing dependence on Russian energy and deepened by the Ukraine conflict, exposed critical vulnerabilities in the continent’s energy security, but also catalyzed a strategic transformation, pushing Europe toward diversification, resilience, and long-term sustainability.

With generating 40% of the federal budget by trading energy products, Russia held the position of a energy giant. It’s the third-largest producer of oil and the second-largest producer of natural gas. According to some estimates, 14% of the country’s economic output comes from fossil fuels.

Before Russia invaded Ukraine in February 2022, the European Union (EU) maintained a substantial energy trade relationship with Russia, heavily relying on Russian fossil fuels to meet its energy demands.

About 155 billion cubic meters (bcm) of natural gas, or roughly 45% of the EU’s total gas imports, came from Russia

The aforementioned figures demonstrate how heavily the EU depends on Russia to supply its energy needs.  About 155 billion cubic meters (bcm) of natural gas, or roughly 45% of the EU’s total gas imports, came from Russia.  Russia was the source of more than 25% of the crude oil imported by the EU.  In addition, over half of the coal imported by the EU came from Russia.

The EU’s energy imports from Russia were valued at approximately €99 billion, representing 62% of all EU imports from Russia.

The entire dynamics of trade have changed since Russia’s military invasion of Ukraine in February 2020. Thus, by considering economic sanctions as one of the international political economy’s tools EU has imposed 16th packages of sanctions on Russia so far, pressurizing Russia to stop its military offensives against Ukraine and adopt the policy of peaceful existence while considering Ukraine as the sovereign and legitimate authority.

The sanctions date back to Russia’s invasion of Crimea in 2014, afterward these sanctions timely intensified parallel to Russia’s other aggressive actions against Ukraine including the illegal annexation of the Donetsk, Luhansk, Zaporizhzhia, and Kherson regions of Ukraine (2022).

The tool used by the EU hit it back when Russia used its energy resources as a weapon to pressure the EU for its steady support to Ukraine by blocking the gas supply backed with other bans on energy transport.

By considering its vulnerable position and the geopolitical scenario the European countries tried to respond collectively by taking various retaliatory measures

By considering its vulnerable position and the geopolitical scenario the European countries tried to respond collectively by taking various retaliatory measures including the lower demand for gas supply, finding new trade partners, and shifting to green energy, Europe’s long-lived dream.

The EU emergency retaliatory measures:

To keep the gas pipelines running and instigating the houses and factories of Europe. The EU comes with objectives like diversifying supply and establishing new partnerships for imports, filling up gas storage to sufficient levels, and reducing gas demands.

The EU Commission has decided to boost gas storage while lowering gas consumption at the same time.

To achieve this the EU Council adopted the regulation on reducing gas demand by 15% through a joint consensus of all member states on Aug 2022.  With some success on March 2023, the council formally adopted an extension of the voluntary gas demand reduction target for 1 year, until 1st March 2024 and that has been enacted till now.

The other pragmatic measure was taken on June 2023, when the council adopted a new regulation on Gas Storage. According to the requirements, underground gas storage on the territory of member states shall be 90% full before the next winter season and at least 80% full before the winter of 2023. When everything is said and done, the EU aims to fill 85% of its underground gas storage capacity by 2022.

EU replaced the USA and Norway as its energy trade partner with the largest LNG trade with the USA and Norway has become the provider of gas.

European powerhouses Total, Shell, and ENI all inked 27-year contracts to import Qatari LNG into the EU in October of last year, with supplies beginning in 2026.

With the skyrocketing energy prices, the energy-based thousands of small businesses like bakeries and big industries have been burdened by the exorbitant cost of energy bills. EU states agreed to reduce electricity consumption in order to lower prices and reduce demand. Secondly, they agreed to collect money from fossil fuel companies and electricity producers’ surplus revenues and distribute it to individuals and businesses that were facing high energy costs.

Russia’s claim on Ukraine has also made it possible for EU to achieve the long-viewed objective of making the EU the world’s largest green market, very urgent. In order to speed up the process, EU nations have agreed to implement a requirement that 42.5% of energy must originate from renewable sources by 2030. They have also committed to reduce the bureaucratic burden on permits for renewable energy projects and make them easier and faster to obtain.

The Kyiv School of Economics reports that Russian oil shipments “dropped to $64.40 per barrel” by the end of 2024 from an initial $70 per barrel

When it comes to the very first objective of the EU which is to give a setback to the Russian economy this has been partially achieved. The Kyiv School of Economics reports that Russian oil shipments “dropped to $64.40 per barrel” by the end of 2024 from an initial $70 per barrel. This implies a decline in oil earnings for the Russian government.This indicates that the Russian government generates less money from the sale of oil.
However, Russia’s economy has remained resilient because of new allies and markets along with illegal trade of energy products like natural gas and oil.

The biggest partners in 2024 were Kazakhstan (11.5%), Norway (13.5%), and the United States (16.1%)

According to recent statistics, the impact of these measures is visible as Russia is no longer among the 7 main partners in the last 2 years. The biggest partners in 2024 were Kazakhstan (11.5%), Norway (13.5%), and the United States (16.1%). The largest increase between 2023 and 2024, was seen in the share of Kazakhstan in exporting petroleum oils (+2.1 pp).

Norway was the largest supplier of natural gas in the gaseous state to the EU in 2024 with a share of 45.6%

With a 47.9% market share in Q4 2021, Russia was the biggest coal exporter to the EU. But according to the fifth set of EU restrictions, coal and other solid fossil fuels that come from or are exported from Russia cannot be bought, imported, or transferred into the EU. Consequently, in Q4 2022, Russia’s proportion of EU coal imports fell to zero. In 2024, Australia (37.3%) and the United States (32.3%) were the two main partners.
Russian gas imports via pipeline and LNG made up 45% of all EU imports in 2021; by 2023, that share had dropped to 15%. These noteworthy successes prompted the EU to quickly phase down Russian fossil fuel imports.

The gas storage project has also become successful as comparing 2023 and 2024, values decreased by 16.2% while the net mass dropped by 7.1%.
The share of energy products also dropped in 2023, down to 17.8%, and in 2024 further down to 15.4%, which means that energy products had become less important in the EU’s overall import matrix.

In 2023 and half of 2024, the liquefied natural gas (LNG) and natural gas in gaseous state gaseous state had the biggest drop which is -1.0% and -0.9%, respectively.
EU has also gained some ground on green energy. Like, the year 2022 was a record year for solar energy, with 41 GW of new solar energy capacity installed, which is 60% more than in 2021 (27 GW). Additionally, capacity continued to increase gradually in 2023, reaching 56 GW. Additionally, wind energy increased by 67% in just two years, from 10.7 GW in 2021 to 17.9 GW in 2023.

When it comes to fossil fuels, from 2022 to now, Russia’s share in EU imports of coal dropped to zero due to the fifth package of sanctions which prohibited to purchase, importing, or exporting of coal and other solid fossil fuels from Russia.

Russia is once again the EU’s second-largest supplier of LNG after the Q4 of 2024, when its proportion of EU LNG imports rose by 5.5 percentage points compared to 2023.

Since natural gas imports in gaseous form rose in value but fell in volume between Q1 2021 and Q3 2022, the EU is likewise feeling the effects of high energy prices. Since then, both value and volume have decreased, suggesting that the trend is somewhat stable. In Q4 2024 compared with Q1 2021, there was an increase of50%in value but a decrease of 43% in volume highlighting the high prices of energy goods while depletion of energy storage.

Europe is also experiencing a swift decline in gas storage levels due to increased heating demand from early cold and more intensified weather

Europe is also experiencing a swift decline in gas storage levels due to increased heating demand from early cold and more intensified weather and reduced wind power generation, necessitating greater reliance on gas for electricity. ​

The expiration of the gas transit deal between Russia and Ukraine at the end of the year, coupled with new U.S. sanctions on Gazprombank, threatens to halt remaining Russian gas supplies to parts of Central Europe, exacerbating supply concerns. ​Along with this the Transgas pipeline, running through Ukraine, was a key route for Russian gas exports to Europe for decades. As of January 1, 2025, gas transit through Ukraine officially ended after the expiration of a 2019 agreement between Gazprom and Naftogaz. While this marked the close of a 60-year chapter, the immediate impact on Europe was limited due to prior diversification of energy sources and reliance on alternatives like TurkStream.

The other challenge faced by the EU is the collapsing of leading economies like Germany’s industrial sector, already impacted by previous energy crises, faces continued strain as rapid storage withdrawals signal persistent energy challenges for the economy.

The energy crisis is severely impacting energy-intensive industries. For instance, BASF, the world’s largest chemicals company, announced plans to cut 2,600 jobs as it faced increased raw material and energy prices, paying an additional €3.2 billion globally in 2022. Germany’s reliance on Russian gas heavily affected businesses like BASF, leading to a €7.3 billion write-down on Russian plants and plans to close several production facilities in Germany.

The other huge challenge is President Trump’s uncertain and assertive behavior towards the EU, causing a disturbance in the EU energy market. European industries grew wary of over-reliance on American energy, fearing that U.S. gas exports might become a political tool amidst escalating trade tensions. Consequently, some European companies began reconsidering Russian gas imports, despite the EU’s 2022 pledge to eliminate such imports by 2027.​

A clear example of the populist rise in Europe can be observed in France, where the National Rally capitalized on public frustration over economic issues and anti-establishment views during the 2024 European elections

The vulnerabilities of the EU’s energy crisis have impacted not only economy but the political landscape too. Amid the fluctuation in prices of energy products and high inflation, the extreme right political parties are weaving their heads making the weak economy a tool to attain power. A clear example of the populist rise in Europe can be observed in France, where the National Rally capitalized on public frustration over economic issues and anti-establishment views during the 2024 European elections. The party won 31.5% of the vote—more than twice the support received by President Macron’s Renaissance party. The same is the case with Germany, Italy, and other countries where these parties are making policies odd to the EU challenging the solidarity and unity of the EU as a supranational body.

Moving forward, sustained coordination and strategic foresight will be essential to securing long-term energy independence and unity across the bloc

The EU’s energy crisis, sparked by Russia’s invasion of Ukraine, exposed deep vulnerabilities but also accelerated a shift towards energy diversification and sustainability. While the EU has made notable progress in reducing its reliance on Russian energy and expanding renewable sources, challenges remain. Rising prices, industrial strain, and political instability continue to test the EU’s resilience. Moving forward, sustained coordination and strategic foresight will be essential to securing long-term energy independence and unity across the bloc.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.