The end of the war in Ukraine is likely to have significant impacts on Russia’s energy exports, particularly in relation to its gas trade with Europe. Several key effects can be anticipated:

Reduced European Demand

• European countries have drastically reduced their reliance on Russian energy since the invasion, with Russian gas imports falling from 155 Bcm in 2021 to just 43 Bcm in 2023.

• The EU aims to end its dependence on Russian fossil fuels by 2027, indicating a long-term shift away from Russian energy.

Limited Recovery Potential

• Experts suggest that Russia’s share of the European gas market, which previously exceeded 30%, is unlikely to return to pre-war levels regardless of the war’s outcome.

• The era of significant Russian gas market share in Europe is considered over, with fundamental changes to Europe’s energy landscape.

Challenges in Redirecting Exports

• Russia has limited options for diverting gas previously destined for Europe, with much of this volume currently shut in.

• While Russia is looking to increase exports to China and Central Asian countries, these markets cannot fully offset lost European deliveries.

Continued Sanctions Impact

• Even after the war ends, Western sanctions may continue to affect Russia’s ability to export energy and access technologies and financing.

• The “shadow fleet” of tankers Russia has developed to bypass restrictions may face increased scrutiny and potential sanctions.

Infrastructure and Contract Issues

• The expiration of the Ukraine transit deal at the end of 2024 could further reduce Russia’s pipeline exports to Europe by half.

• Remaining long-term contracts with European buyers will need to be addressed, presenting legal and contractual challenges.

Global Market Adjustments

• The reshaping of international oil and natural gas markets, including increased LNG trade, will continue to affect Russia’s position as an energy exporter.

• The United States has emerged as a major LNG supplier to Europe, potentially maintaining this role post-war.

In conclusion, while Russia may retain some energy export capacity, the end of the war is unlikely to restore its previous dominant position in European energy markets. The conflict has accelerated Europe’s energy diversification and transition efforts, creating lasting changes in global energy trade patterns.