Europe’s dependence on Kremlin energy has fallen dramatically. From next year, all remaining Russian gas imports will be banned under EU legislation now being phased in.
Not only has reliance on an aggressive neighbor lessened, but developments over the past decade signal that Europe can exploit new opportunities to shut out Russian gas even after the Ukraine war concludes.
Take Romania, which is on the verge of an important increase in offshore gas production, adding substantial new volumes to a regional market where demand growth struggles to keep pace.
That produces a dilemma — will Romanian gas end up competing with supplies from its most important strategic partner, the United States, or should its policymakers treat these volumes as part of a new regional energy security architecture?
The answer matters far beyond Romania.
The EU’s gas diversification drive and the collapse of Russian pipeline flows forced Europe to accelerate investment in alternative supply routes.
One of the most important developments has been the emergence of the so-called Vertical Gas Corridor along the Trans-Balkan pipeline, a route that once carried Russian gas via Ukraine, Moldova and Romania to the Balkans and Turkey.
After Russia redirected flows to another corridor via Turkey in 2020, the pipeline was largely left idle, creating an opportunity to repurpose it as a south-north corridor linking Greece, Bulgaria, Romania, Hungary, Slovakia, Ukraine, and Moldova.
In recent years, it has been used for US liquefied natural gas (LNG), Azeri gas, and some remaining Russian supplies into Central and Eastern Europe.
At the end of 2027, when Russian gas is due to be completely phased out, the corridor could also carry Romanian offshore gas.
Neptun Deep, Romania’s flagship Black Sea project, holds an estimated 100 billion cubic meters (bcm) in reserves, and if actual reserves align with initial forecasts, the country could nearly double its production to 17-18 bcm/year, consolidating Romania’s role as the EU’s top gas producer, although, admittedly, much smaller than non-EU supplier Norway.
But rising production brings a new challenge: finding markets for surplus gas.
Even assuming current domestic demand of around 10 bcm/year and an additional 3-5 bcm/year from new gas-fired generation and limited industrial growth, Romania could still be left with significant excess volumes.
What to do? At first glance, neighboring markets seem an obvious outlet for Romanian gas, but each has its constraints.
While Hungary’s gas demand is relatively great by regional standards, limited interconnection capacity, geopolitical considerations, and long-term supply contracts constrain its ability to absorb Romanian exports.
Meanwhile, Bulgaria’s growing battery storage, renewables, and planned nuclear investments are likely to curb future gas demand growth.
As a result, Romania risks entering an increasingly crowded regional market, competing with other fuels and mainly US LNG, where the EU has promised to increase purchases.
The search for buyers has naturally focused on end-user markets, but that may be the wrong way to view Romania’s surplus gas.
Romania’s northern neighbor, Ukraine, offers a different opportunity.
For years, high tariffs, transmission costs and regulatory barriers limited the commercial appeal of exporting gas to Ukraine.
Those constraints are gradually easing.
Initially a reluctant neighbor, Romania has now started to collaborate more with Ukraine, cutting tariffs and even considering limited exports. All this is helping to improve the actual economics of moving Black Sea gas north.
While Ukraine’s gas demand could rise significantly once the war ends and reconstruction begins, its greatest value may lie in its vast underground storage capacity. In many ways, circumstances are aligning for closer energy cooperation between Romania and Ukraine.
Under Romanian legislation, the government has pre-emption rights over new Black Sea gas production, giving it the option to purchase volumes before they are offered to other buyers.
The government has already opted to use this statutory right to purchase around 5 bcm from Neptun Deep between 2028 and 2034.
On the other hand, the EU is now working to update its security of supply regulation and has been in talks with Ukraine to create a strategic stock for Europe.
Although several Central and Eastern European countries, including Romania, maintain underground gas storage facilities, these are largely geared toward commercial use.
Their capacity, flexibility and cost structure make them less suitable for strategic stockholding, particularly when compared with Ukraine, which has made up to 10 bcm of storage capacity available to European companies.
This gives Ukraine a unique advantage as the only country in the region capable of accommodating large-scale strategic reserves while also providing substantial commercial flexibility.
Creating a strategic gas reserve in Ukraine would not only help shield European consumers from increasingly volatile, geopolitically driven energy markets, but also give the EU a stronger stake in protecting Ukraine’s critical energy infrastructure.
By combining Romanian offshore production with Ukrainian storage, Europe could create a regional strategic reserve capable of enhancing energy security across Southeast and Central Europe. In doing so, it would transform surplus gas into strategic leverage.
If policymakers fail to seize that opportunity, Romanian gas will simply enter an increasingly competitive market, battling US LNG for a limited pool of demand.
The choice Europe faces is therefore not merely commercial; it is geopolitical.
Petroslava Bratanova is an External Affairs Intern at the Center for European Policy Analysis (CEPA) and is pursuing a Master’s in International Energy Transitions at Sciences Po Paris.
Aura Sabadus is a senior energy journalist writing for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. She is also a Non-resident Senior Fellow with the Democratic Resilience Program at the Center for European Policy Analysis (CEPA).
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
