On May 6, 2025, the European Commission (EC) gave concrete expression to something it has been proclaiming since the Russian invasion of Ukraine in February 2022: on January 1, 2028, the EU will completely stop importing Russian energy. This includes all imports of (especially fossil) fuels, even if EU member states are still locked into long-term contracts with Gazprom, Rosneft, or another Kremlin-controlled state-owned company after 2027.
Immediately after publication, several experts expressed doubts about the legal tenability of the force majeure provision, which is supposed to allow Western companies to unilaterally terminate their long-term contracts. Less media attention was paid to the part of the REPowerEU plan that comes into effect earlier: as of Jan. 1, 2026, imports of Russian energy through the spot market are prohibited.
Europe faces a risky winter
In 2024, the EU imported 52 bcm of gas from Russia, accounting for about 19% of total gas imports. According to the EC, about a third of Russian gas imports reach the European market through spot deliveries. That means EU member states will have to commit some 15 to 20 bcm of gas elsewhere sometime between now and Jan. 1, 2026 to maintain current import levels - or gamble on the spot market.
The gas market is still tight, underscoring the importance of keeping gas imports up. Although the filling of European gas stocks is going better than expected, it is definitely not holding up. The Netherlands is expected to meet its national target of 80% (110 TWh) by Nov. 1, but with a current fill rate of 59%, the level is considerably lower than in the previous two years. A similar picture is visible elsewhere in Europe, such as Germany (62%).
Avoiding setbacks in filling gas reserves, preventing accelerated withdrawals from them, and continuing to bring in gas imports during the winter months are crucial to keeping gas affordable in Europe. In practice, affordability is largely in the hands of the weather gods. Here we depend not only on the absence of heat waves and temperatures in Europe in the coming winter (2025-2026), but also on the weather in Asia (both summer and winter). Fingers crossed, you can almost hear the EC thinking.
Even with Russian spot supplies, the gas market situation is tense. This makes the timely replacement of the nearly 20 bcm that will be gone by January 1, 2026 all the more important. Most of the gas coming onto the market in 2025 that is not yet committed to long-term contracts is American (about 23 bcm). While this does not look bad on paper, given Europe's earlier 'trade deal' with President Trump, it does mean that the EU is largely handing itself over to the US.
For LNG, the EU is now 55% dependent on the US - up sharply from 40% in 2024. With the ban on gas imports from Russia, the dependency only threatens to increase further. Before the Russian invasion of Ukraine, Europe was dependent on Russia for about 40% of its gas demand. Even then, diversification was the watchword, as it is now.
Russia's war economy is running properly
Eighteen sanctions packages and a veritable roadmap later, however, the Russian economy is still running as it should. Economic growth was around 4% in 2024 and is expected to reach 1.1% this year. Despite massive military spending, the budget deficit is reportedly only 1.7%, although this is partly due to the low exchange rate of the Russian ruble.
The absence of economic malaise is largely due to the (deliberately created) ineffectiveness of sanctions from the G7 and the EU. These were introduced one by one and at long intervals, giving the Russian government and business community plenty of time to adjust.
As a result, the sanctions have mainly led to a shift in trade flows. Europe still imports much Russian energy, albeit - in addition to LNG - largely indirectly; for example, in the form of oil products through third countries such as Turkey and India, or natural gas processed into fertilizer. In addition, trade between Europe and Russia-affiliated countries such as Kazakhstan, Georgia, Kyrgyzstan and Armenia has picked up since the outbreak of war. Through these routes, Russian products still find their way to Europe - and European products to Russia.
Sanctions are a balancing act
Europe's policy toward Russia constantly seeks a balance: hitting the country economically, without raising prices in Europe too much. The resulting sanctions packages hurt Russia, but have by no means brought the economy to its knees. The European ban on Russian energy imports is unlikely to succeed either - even though the side effects for Europe will be felt.
By banning Russian spot deliveries as of Jan. 1, 2026, the EC is knowingly putting pressure on affordability - and possibly even security of supply. This makes good political sense: Putin is an aggressor and must be opposed. Taking the wind out of Russia's sails financially is an important part of this.
At the same time, gas and electricity prices in Europe are still two to three times higher than elsewhere in the world. As a result, expanding supply should be the logical goal. Instead, with the elimination of Russian gas, trade flows will first have to be shifted to maintain current supply at all.
Structurally higher energy prices have irreversible consequences for energy-intensive industries - with all the implications for strategic autonomy. In addition, high energy prices for consumers and the loss of jobs lead to social discontent, fueling populism. When citizens are faced with rising energy bills and job losses in traditional sectors, already shaky distrust of established politics grows. This creates fertile ground for parties opposed to European integration and international cooperation. Thus, with this policy, Europe may be undermining its own democratic foundation - and playing right into Putin's hands.
This column was written in a personal capacity by Fabian Steenbergen.
