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These tiny European countries went big and cut off all Russian gas imports

April 6, 2022, 12:00 PM UTC

European countries have placed sanctions on nearly every component of Russia’s economy, but gas remains a vulnerable point for Europe.

European importers pay Russian companies around $850 million each day for their oil and gas, and Russia supplies around 40% of Europe’s gas and 25% of its oil. 

Countries like Germany and Italy are still highly reliant on Russian gas, and because of this, a European energy ban has been a much more difficult calculation than last month’s Russian oil ban was for the U.S., which imported no natural gas and very little oil from Russia.

But as the Russian army’s transgressions in Ukraine become clearer, some European countries have decided that an ongoing dependency on Russian energy is simply no longer tenable, and that pulling the plug on imports is the only option to hold President Vladimir Putin accountable.

And they’re right in Russia’s backyard. 

The Baltics’ decision

On Saturday, Lithuanian energy minister Dainius Kreivys announced that the country would stop importing Russian gas, becoming the first European nation to do so. 

The ministry claimed that it had been operating without Russian gas transmission since Friday, while the country’s President Gitanas Nausėda suggested the switch was made possible by years of planning on how to wean itself off Russian energy imports.

“From this moment on— no more Russian gas in Lithuania,” Nausėda tweeted on Saturday. “Years ago my country made decisions that today allow us with no pain to break energy ties with the aggressor. If we can do it, the rest of Europe can do it too!”

Neighboring Baltic states Latvia and Estonia also announced Saturday that they too would begin boycotting Russian gas, amid the largest international repudiation yet of Putin’s war in Ukraine.

An unforgivable act

Europe has benefited from Russian gas for years, but that relationship is quickly becoming politically untenable. 

The discovery of mass graves of executed civilians in Bucha, a town near Ukraine’s capital Kyiv, created a global outrage and sparked calls to condemn Putin as a war criminal

The development also put pressure on European countries to cut off all remaining economic ties to Russia.

The images from Bucha informed the Baltic states’ decision to immediately halt Russian gas imports. 

“Russian army of mass murderers retreat from Bucha reveals full scale of atrocities,” Lithuanian Foreign Minister Gabrielius Landsbergis said in a tweet on Sunday. 

“No other way around — buying [Russian] oil & gas is financing war crimes. Dear EU friends, pull the plug. Don’t be an accomplice,” he added.

A powerful Russian military succeeding in Ukraine is a much more pressing threat for the ex-Soviet Baltic states than for the rest of Europe, which might be a reason why these three small countries are willing to go further than any other Western nations in curtailing Russia’s advances.

“All three countries are strong supporters of Ukraine and regard it as their first line of defense against Russia’s aggression,” Tomas Jermalavicius, head of studies and research fellow at Estonia’s International Centre for Defense and Security, told Fortune.

Diversifying energy supply

Lithuania’s ability to decouple itself from Russian energy largely comes down to having already done work to wean itself off Russian gas.

“[Lithuania] had already done its energy diversification homework, launching a liquefied natural gas (LNG) terminal back in 2014,” Agnia Grigas, a senior research fellow at the Atlantic Council and author of the 2017 book The New Geopolitics of Natural Gas, told Fortune

“Since 2014, Lithuania has been importing American, Norwegian, and Qatari LNG.”

Lithuania began working on acquiring more LNG after Russian companies monopolized the country’s gas industry, leading to some of the highest gas prices in Europe. 

Other European countries, including Poland and Finland, have since followed suit in building their own LNG terminals. Increasing LNG flows from other trading partners may be what ultimately helps Europe kick its Russian gas habit. 

Grigas says the problems standing in the way have less to do with infrastructure, and more with finding an agreement between European nations who can trade LNG within the bloc.

A big, pipeline-sized question mark continues to hang over Germany, the most reliant European country on Russian gas, and which does not have a LNG terminal. 

Germany has spent years slowly ratcheting up Russian gas imports, and replacing them will require agreements with other EU countries who can access LNG flows.

“It is a question of political will and having done their diversification homework,” Grigas said. “Most EU countries have interconnected pipelines with neighboring countries, so if they don’t have LNG access themselves they could import that from neighboring countries that do.”

“There’s little excuse for any EU country not to limit their Russian gas imports,” she added. 

Europe’s energy independence

Estonia and Latvia, the other countries to cut off Russian gas imports, do not have access to their own LNG terminals unlike Lithuania, Jermalavicius said, but they do have enough in reserve to make up most of the gap until next winter, and plan on making more use out of Lithuania’s LNG terminal, which has so far been relatively under-utilized.

On Monday, President of France Emmanuel Macron said that a European ban on Russian coal and oil “must be able to move forward” in response to the war crimes perpetrated in Bucha, although stopped short of calling for a gas ban.

Putin has tried to leverage his country’s status as a key energy exporter to salvage a Russian economy crippled by sanctions. 

Last week, he demanded that Europe begin paying for energy imports in Russian rubles to help prop up the currency, threatening to rip up contracts if payments weren’t made.

Putin hasn’t done that yet, but it is becoming more likely that a temporary reduced energy supply is in store for Europe, regardless of which side initiates it. 

Germany has already begun to prepare, recently initiating protocols to ration its energy.  

After years of accepting cheap and abundant Russian gas, Europe’s transition to becoming more energy independent won’t be painless, but it may well be necessary, and long in the making.

“Russia’s war of aggression and extermination in Ukraine is causing truly tectonic shifts in the European energy system,” Jermalavicius said. “Talk about the EU’s energy sovereignty is being replaced, at long last, by a most vigorous walk, if not yet a full-scale dash, in the right direction.”

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