EU rejects Russian gas return despite energy price surge

The European Commission has drawn a hard line against any return to Russian fossil fuels, dismissing calls from Hungary and Belgium to reopen energy trade as a response to price spikes triggered by the widening conflict in Iran. Speaking at the margins of an energy ministers' summit in Brussels on Monday, Commissioner Dan Jørgensen said the bloc would not waver from the phase-out agreed after Moscow's 2022 invasion of Ukraine, even as wholesale gas prices climb toward levels last seen during the 2022 crisis.

A unified front tested by price pressure

The statement marks the most explicit rejection yet of the lobbying that has intensified since the Iran-Israel war disrupted Middle Eastern gas flows in January. Russian pipeline gas once supplied roughly 40 percent of EU imports; that figure has fallen to near zero after the sabotage of the Nord Stream pipelines, the expiry of the Ukrainian transit agreement at the end of 2024, and the Commission's own REPowerEU legislation. Yet the economic pain is real. Dutch TTF front-month futures have traded above €55 per megawatt hour for three consecutive weeks, more than double the 2024 average, pushing energy-intensive industries in Germany and Italy to curtail production.

Jørgensen acknowledged the difficulty but framed it as a strategic choice. "We've been far too long dependent on energy from Russia, making it possible for Putin to blackmail us with energy, making it possible for Putin to weaponize energy against us, and we are determined to stay on course with these issues," he told reporters. "It would be a mistake for us to repeat what we did in the past." The rhetoric echoes Commission President Ursula von der Leyen's warning earlier this month that a return to Russian supplies would constitute a "strategic blunder" for European security.

Eastern and Western capitals break ranks

The unity that held through the first two winters after 2022 is fracturing. Hungarian Prime Minister Viktor Orbán, long the Kremlin's most sympathetic voice in the Council, called last week for a suspension of energy sanctions, arguing that European households and factories cannot afford the current trajectory. On Sunday, Belgium's new Prime Minister Bart de Wever went further, suggesting the EU should negotiate a pathway to "regain access to cheap energy" from Russia. De Wever's intervention is notable: Belgium hosts the Zeebrugge LNG terminal, a key entry point for global gas, and his nationalist-conservative coalition has made industrial competitiveness a centrepiece of its programme.

Neither leader commands a blocking minority on energy sanctions, which require unanimity to lift. But their public stance gives cover to industrial lobbies in Germany, Austria and Slovakia that have privately urged a temporary waiver. The German chemical association VCI estimated last month that sustained prices above €50 per MWh threaten 300,000 jobs across the sector. Chancellor Olaf Scholz's government has so far backed the Commission line, but with a federal election due by October, the pressure is mounting.

Moscow and Washington signal willingness

The external dynamics have shifted in ways that complicate the EU's messaging. Russian President Vladimir Putin has repeatedly offered to resume pipeline deliveries via the remaining TurkStream route and the Yamal-Europe line, which has been idle since Poland sanctioned Gazprom's Polish subsidiary in 2022. Meanwhile, the United States temporarily lifted secondary sanctions on Russian energy transactions in February, a move officially framed as facilitating humanitarian trade but widely read in European capitals as a signal that Washington would not oppose a limited EU re-engagement if it helped stabilise global markets.

Jørgensen dismissed both signals. The US waiver, he said, does not alter the EU's own legal framework, and Putin's offers are "not credible" given the ongoing war in Ukraine. The Commission's position is that any purchase, however small, would flow revenue to the Russian budget at a moment when the Kremlin is ramping up defence spending to an estimated 7.5 percent of GDP for 2026.

No electricity market reform on the table

Perhaps the most consequential part of Monday's briefing was what Jørgensen ruled out domestically. He confirmed that the Commission will not propose structural changes to the EU electricity market design, a reform that has been debated since the 2022 crisis exposed the marginal pricing mechanism's vulnerability to gas price spikes. The decision, first reported by POLITICO on Sunday, means the current system, where the most expensive plant sets the wholesale price for all generators, will remain intact for the foreseeable future.

The rationale is twofold. First, the Commission argues that the market design worked as intended: high prices signal scarcity and incentivise investment in renewables, storage and demand response. Second, there is no consensus among member states. France and Spain have pushed for deeper decoupling of renewable and fossil prices, while Germany and the Netherlands defend the current model as essential for cross-border trading efficiency. Reopening the file would consume political capital the Commission prefers to spend on the Clean Industrial Deal and the 2040 climate target.

Oil ban to complete the phase-out

The next legislative step is already scheduled. The Commission plans to propose a ban on Russian crude and refined oil imports next month, closing the last significant energy revenue stream from Moscow to the EU. Russian oil still enters the bloc via a loophole that permits refined products processed in third countries, primarily India and Turkey, to be imported without restriction. Closing that gap would align the oil regime with the gas and coal bans already in force.

Industry analysts estimate the remaining indirect Russian oil flows at roughly 300,000 barrels per day, a fraction of the 2.2 million bpd the EU imported before 2022. But the symbolism matters. A full fossil fuel embargo would allow the Commission to argue that the economic decoupling is complete, strengthening its hand in any future negotiations on Ukraine's reconstruction or European security architecture.

The alternatives: LNG, renewables and demand destruction

With Russian piped gas gone and no market reform coming, the Commission's toolkit for the next winter rests on three pillars. Liquefied natural gas imports have expanded rapidly: EU regasification capacity grew by 30 percent between 2022 and 2025, and long-term contracts with the US, Qatar and Algeria now cover an estimated 60 percent of pre-crisis Russian volumes. The second pillar is accelerated renewable deployment. The REPowerEU target of 45 percent renewable energy by 2030 is legally binding, and permitting reforms adopted in 2024 have cut average wind and solar project lead times from seven years to under three in several member states.

The third pillar, rarely stated explicitly, is demand reduction. Industrial gas consumption in the EU fell 18 percent between 2021 and 2025, according to Eurostat data. Part of that is efficiency; part is permanent closures of fertiliser, steel and glass capacity. The Commission's forthcoming "affordable energy" action plan, due in April, is expected to focus on shielding vulnerable households and small businesses through targeted income support rather than price caps, which it argues distort investment signals.