March 15, 2025 - 8:00am
As negotiations over a ceasefire in Ukraine intensify, US President Donald Trump has said that he hopes “Russia will do the right thing” and accept the current terms. While Vladimir Putin has cautiously heaped conditions on any ceasefire, there are reasons to think he may be forced into accepting the deal.
Take, for example, the recent news of Gazprom’s economic troubles. According to Reuters, the Russian gas giant is considering selling some of its prime real estate in St Petersburg and is also planning a considerable reduction of its workforce. While Russia was well prepared to withstand Western sanctions for a prolonged period, it could never do so indefinitely and Moscow is starting to feel the economic strain. Trump knows this, and this week said that if Russia snubs a ceasefire deal he would “do things financially that would be very bad for Russia, would be devastating for Russia. But I don’t want to do that because I want peace.”
The Russian pipeline network on which Putin’s war machine relies has been designed for over 40 years to supply oil to Western and Central Europe. But these arteries are running dry: Gazprom’s sales through the Urengoy-Pomary-Uzhhorod pipeline ended when it was shut down in December last year. With the additional closures of the Nord Stream and Yamal pipelines, Gazprom’s only remaining route for transporting gas to Europe is through Turkey, using the TurkStream and Blue Stream pipelines beneath the Black Sea. Gazprom’s exports to Europe via pipeline have dropped by 75% and the still-developing new pipelines aiming to supply China and Asia cannot make up the difference. Even the most ambitious projects being contemplated to transport gas eastward would not reach half of the previous annual peak exports of 180 billion cubic meters.
Moscow expected a swift victory in Ukraine and, as a result, a temporary disruption of the gas trade, as happened with the annexation of Crimea in 2014. Russia no doubt thought exports to Europe would quickly return to normal. This calculation was not entirely baseless, since as late as January this year there have been debates among EU member states to restart buying Russian gas in the case of a ceasefire. Yet, as time passes, Russia’s position as one of Europe’s main energy suppliers is gradually eroding, and Putin might be overplaying his hand by delaying a ceasefire.
Gazprom competitors like Novatek are still providing liquified natural gas (LNG) to Europe, often in larger amounts than in the past. The LNG market, however, appears to be heading for a glut with more and more capacity from the US to Qatar coming online. While this could still take two or three years to fully materialise, it will massively weaken the long-term position of Russia as an energy exporter.
This gas glut is going to be a problem for Putin: if the price of gas and oil collapses because the world is overproducing, the Europeans will have an even easier time finding alternatives. This is not going to solve the problems of the EU’s flawed energy policies, but it will certainly strengthen its position vis-à-vis Russia. Assuming that the Kremlin is aware of these conditions, one could expect the Russians to remain at the table.
Moscow has been incredibly lucky that Europe decided against nuclear and fracking as reliable energy sources. Instead, the EU waited for the non-Russian world’s gas reserves to come online. The resultant high prices incentivised US and Middle Eastern LNG production to such an extent that there may be no space for Russia to regain its market share. As the ceasefire negotiations proceed, Putin will surely be assessing the perilous state of the Russian oil and gas industry.
Ralph Schoellhammer is assistant professor of International Relations at Webster University, Vienna.
Raphfel
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SubscribeMoscow wasn’t just ‘lucky’ that Europe decided against fracking- Putin spent $95M inserting anti-fracking scare stories into the media via NGOs and campaign groups.
There was plenty of home-grown stupidity and virtue-signalling as well.
If Europe ever goes back to directly buying Russian oil and gas they want their head testing
Canada and Venezuela would be great sources for heavy crude.
I think now is an ideal time to start buying from the Canadians.
Making the yanks more reliant on the Venezuelans as a result of Trumps nonsense would be a funny outcome
I occasionally fantasise about CANZUK acting as a counterweight to the US, but the military reality is unlikely to change.
If Canadian politicians ever get too tough with the US, the Americans will just invade.
Americans between 3%-3.5% on defence, compared to around 2% for most of Europe.
However thanks to the dollar being the reserve currency they’re able to run the kind of deficits that would bankrupt most European nations. If they ever lose that (and alienating their allies and trading partners is a good way to go about it) then their military budget would have to contract massively
“ Moscow has been incredibly lucky that Europe decided against nuclear and fracking as reliable energy sources”
Not just luck! They’ve worked hard for many decades to cultivate the hard left, eco warriors, pseudo-science, anti-west sentiment, racial division, peace lobbies, etc. throughout the western democracies.
It’s funny how things turn.
For years it was the left who were the Kremlins “useful idiots” criticising the west snd ignoring the crimes of the Soviet Union. These days it’s usually the online right who blindly regurgitate the Russians propaganda and berate the west
The trick is to realise that Russia isn’t the only country ruled by a psychopath.
Anyone who trusts any government anywhere is a useful idiot.
Problem. The sycophants surrounding Putin have not made him aware of these issues.
That doesn’t sound like a problem for the rest of us