The Conversation: Europe needs gas and Russia needs cash, so expect an energy-fuelled reconciliation

The Ukraine crisis caused relations between Russia and the EU to fall to their lowest point since the Cold War. But despite the bickering and outright conflicts, both still need each other: Europe relies on Russian gas to keep warm, and Russia in turn needs revenues. With winter on its way and capital flight from Russia reaching dangerous levels, the outlook should draw the EU and Russia back together.

Gazprom is the only supplier of Russian natural gas to Europe. In 2013, it exported 161.5 billion cubic meters (bcm) of gas to the rest of the continent (Germany, Turkey and Italy were the biggest recipients). That works out to around 30% of Europe’s consumer market. This in turn means European consumers are responsible for around 40% of Gazprom’s annual revenues.

Russia currently exports gas to Europe through five routes: via Ukraine (supplying Slovakia, the Czech Republic, Hungary, and feeding into western Europe, as well as to south-eastern Europe and Turkey); via Belarus to the Baltic states, Poland and Germany; via the Blue Stream pipeline directly into Turkey; and via Nord Stream directly to Germany and Finland.
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