Why is the EU still buying Russian energy?

Key takeaways:

– LNG has saved the EU from what could have been a much worse energy crisis in 2022, and helped to alleviate the impact of the loss of Russian pipeline gas supplies to the continent following the war in Ukraine. Without LNG, gas prices in Europe would have been much higher and the crisis would have lasted for much longer.

– LNG gives customers bigger flexibility unlike pipeline gas which locks the gas supplier and customer in a rigid long-term relationship.

– The increase in European gas prices have attracted LNG from all around the world. Within months after the war in Ukraine and the subsequent skyrocketing of prices, LNG cargoes were queuing at European LNG import terminals.

– Despite the significant drop in its market share, Russia managed to replace some of its pipeline gas with LNG to Europe.

– To reach its goal of completely reducing its reliance on Russian fossil fuel imports by 2027, the EU has to expand its import infrastructure to be able to absorb different sources of supplies. Additionally, diversification of sources of energy and suppliers will be key for the EU’s intended energy security and climate goals.