EU Gas Market: Geopolitical Risks and Infrastructure Limits

Two main constraints stand out: technical capacity (current 55 million m³/day nears the design max of 56–57 million m³/day) and a bottleneck in the Balkan Stream infrastructure (via Bulgaria and Serbia, capped at 20 billion m³/year).​

Significant export growth via this path is impossible. Maximum upside is 1–2 billion m³/year, insufficient to ease EU shortages.

​​The military conflict blocking Qatari exports has become the key driver.

​Strait of Hormuz blockade and infrastructure damage will leave the global market short over 30 billion m³ of gas in 2026.

​Europe ended winter with record-low storage at 28%, forcing EU nations to buy gas at any price for next season. TTF hub prices have surged to $600 per thousand m³.

​Russian LNG output is set to rise by 9.5 billion m³ (mainly Arctic LNG-2 and Portovaya). But EU sanctions and its 2027 ban on Russian gas will redirect volumes to Asia.

​This scenario illustrates a classic "energy trap." Politically, the EU faces a hard deadline (November 2027) to shun Russian resources. Physically, Middle East force majeure creates deficits threatening regional energy security.

​Thus, the EU won't soften its stance on Russian gas officially yet, but market signals (46% price hikes) already highlight critical imbalances.

​Russia remains the only player able to quickly fill gaps via existing pipelines (if politically feasible, e.g., residual Nord Stream branches or boosted Ukraine transit).

​A summer cooling demand peak overlapping with storage refills could spark another European energy crisis.

​Pipeline supplies won't revive in volume due to southern route limits. But for remaining buyers (Hungary, Serbia, Slovakia), their value will multiply amid LNG shortages. EU flexibility may emerge only if deficits cripple German and Central European industry.

Author: Candidate of Economic Sciences, Associate Professor at the Department of World Economy and International Finance, Financial University under the Government of the Russian Federation Natalia Ivanovna Chovgan.