For years, Russian gas was seen as the bedrock of Europe’s industrial competitiveness, reliable, abundant, and above all, cheap. But as Europe transitions away from Russian energy, the true cost of that dependency is finally coming into view. This article reconsiders the myth of cheap Russian gas, showing that beyond the apparent price advantage, the continent paid a high price in terms of strategic exposure, political leverage, and security risks. Europe is now charting a more resilient energy future, and it’s a shift long overdue.

The notion that Russian gas was a bargain for Europe is deeply ingrained in policy and business circles. For decades, long-term contracts and oil-indexed pricing gave the impression of a steady, low-cost fuel source. Many pointed to it as the backbone of European industry, particularly in countries like Germany, Austria, and Italy. But hindsight is 20/20, and what we now see is that “cheap” came with strings attached.

Today, that illusion has unraveled. The economic case for Russian gas is crumbling alongside the pipelines that once carried it. Europe’s push to diversify energy sources, invest in clean alternatives, and restructure demand is revealing that what was once seen as a cost-saving strategy actually imposed hidden, and very real, economic burdens.

Economic reality check

While Russian gas may once have been marginally cheaper under certain long-term contracts, the data over the past decade tells a more nuanced story. Between 2010 and 2020, Gazprom’s oil-indexed pipeline prices hovered just below European spot gas prices, at times offering a slight advantage, but only under specific market conditions.

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By 2021, that narrative began to fall apart. As Gazprom restricted flows during Europe’s recovery from COVID-19, prices surged. In fact, from late 2021 through early 2022, before and after the invasion of Ukraine, Russian gas was trading at parity with, or even above, other non-Russian imports into Europe. According to Reuters, the average price for Russian gas imports exceeded €40 per megawatt-hour in 2021 and shot well above €100/MWh in early 2022, closely tracking or even surpassing prices paid for LNG cargoes from the U.S. and Qatar.

These were not anomalies, they were a direct consequence of Gazprom’s manipulation of supply, as flows through Ukraine and Nord Stream were tightened. European gas buyers found themselves locked into high-priced deliveries or scrambling to secure alternative sources.

By 2023, Russian pipeline gas was no longer a cost advantage. In fact, with volumes drastically reduced, spot LNG began to play a stabilizing role, while long-term dependency on Gazprom had turned into a vulnerability. The “cheap gas” thesis, in economic terms alone, had fully unraveled.

The hidden costs of dependence

What made Russian gas seem cheap were costs that didn’t show up on the balance sheet: vulnerability to supply disruptions, market manipulation, and strategic coercion.

These costs became painfully visible when Russia invaded Ukraine. Europe’s reliance on Russian gas constrained its diplomatic and military response, particularly in countries deeply dependent on Gazprom. But this wasn’t the first warning sign. Gas supply disruptions in 2006, 2009, and again in 2021 foreshadowed how Moscow could and would use energy as leverage, pressuring Ukraine and sending signals to Brussels that resistance would come at a price.

Beyond economics, this was a strategic liability. Every pipeline and contract gave Moscow influence. Every delay in diversification bought time for the Kremlin’s geopolitical playbook. And every euro spent on Russian energy indirectly subsidized the military machine that eventually rolled across Ukraine’s borders.

Sabotage and grey zone threats

Even as Europe has cut imports of Russian fossil fuels, the associated risks haven’t vanished. Instead, they’ve taken new forms. Since the invasion of Ukraine, there has been a noticeable uptick in irregular activity, sabotage of undersea cables, unexplained infrastructure failures, and surveillance near offshore energy assets. Intelligence services across Europe have reported heightened Russian espionage and subversion operations, often targeting critical infrastructure.

This reinforces a key lesson: energy dependence is never just economic. It creates exposure to soft power, asymmetric tactics, and even covert action. Europe’s existing energy infrastructure, pipelines, ports, storage facilities, must now be protected not just from market failure, but from foreign interference.

The lesson is clear. Even if Russian gas came cheap on paper, the security costs were massive, and enduring.

Rebuilding without illusions

In the aftermath of this reckoning, Europe is rebuilding its energy system with a stronger foundation. The diversification of LNG sources, the acceleration of renewable energy deployment, and the structural shift toward electrification are not just climate solutions, they are security upgrades.

Countries like Germany and the Netherlands have rapidly scaled their LNG terminal capacity. France and Spain are doubling down on grid integration and renewables. Eastern European nations, once deeply dependent on Russian gas, are now leading advocates for energy independence and clean alternatives.

Meanwhile, the EU’s REPowerEU strategy has formalized what was once an emergency response: a permanent break with fossil fuel dependency from Russia, backed by regulation, investment, and market reform.

Conclusion

The idea that Russian gas was ever “cheap” should now be seen for what it was: a short-term mirage with long-term consequences. It left Europe vulnerable to geopolitical blackmail, supply shocks, and now, covert threats. The continent has paid dearly, economically, politically, and morally, for the illusion of cheap energy.

In previous publications, I’ve written about how energy choices shape sovereignty and stability. This is perhaps the clearest example yet. Europe’s shift away from Russian gas is not just a reaction to war; it’s a correction of course. A decision to prioritize resilience, transparency, and long-term value over short-term discounts.

The true cost of Russian gas was never just measured in euros per megawatt-hour, it was measured in lost time, compromised autonomy, and strategic risk. It’s a price no region can and should have to afford to pay again.

By Leon Stille for Oilprice.com

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