The natural gas price shock Europe is experiencing from the Iran war could accelerate the region’s decoupling from Russian energy, while the continent is pushed further into the arms of the US.
The Iranian attack that forced QatarEnergy, the world's second-largest liquefied natural gas exporter, to halt production last week sent European benchmark gas prices surging by nearly 50 per cent.
This underscored how exposed the continent remains to geopolitical shocks beyond its borders and the necessity of prioritising energy security above all else.
Qatar supplied only about four per cent of European Union gas imports in 2025, according to the European Council, but with these volumes now unavailable, the marginal gas molecule will increasingly come from the US, the world's top gas producer and LNG exporter.
This, in turn, could give the US even more leverage to push Europe to accelerate its full decoupling from Russian gas. That is something Western leaders have sought to achieve through sanctions since Moscow's invasion of Ukraine four years ago.
Any temporary easing of US sanctions on Russian oil during the war shouldn’t alter this trajectory for gas. And Russian President Vladimir Putin’s threat last week to halt Russia’s remaining gas exports to Europe will provide further impetus for reducing this dependency. Russian gas still accounts for roughly 10 per cent of EU imports.
The EU has mandated that all Russian gas imports must end by September 2027, but legal ambiguities and loopholes could prolong dependence on Russian gas beyond 2028.
While the US now supplies the majority of Europe’s LNG, Russia’s state-controlled giant Gazprom remains the dominant supplier of the fuel in Central and Eastern Europe and Southeastern Europe.
These regions are also the destination for almost all of the Russian pipeline gas flowing into Europe, with the remainder entering EU markets via the TurkStream pipeline system linking Russia and Turkey.
Unlike Northern Europe, which has rapidly diversified its energy operations in recent years through new LNG terminals and pipeline interconnections, Central and Southern countries remain structurally exposed.
Limited storage, fragmented transmission tariffs and poorly integrated markets have kept Russian pipeline gas commercially more attractive. This is why, at the transatlantic gas security summit held in Washington in late February, just days before the conflict began, the Americans had a clear message: accelerate the flow of US LNG into Europe's most vulnerable markets.
To achieve this, senior US officials and European energy ministers are focused on a new flagship project: the Vertical Gas Corridor linking Greek LNG terminals with Bulgaria, Romania, Moldova and Ukraine.
The Vertical Gas Corridor could fundamentally reorient Central and Southern European gas trade flows toward Atlantic supply chains, locking in long-term LNG imports and making the Balkans the next frontier market for exporters.
As part of this effort, major US exporters including Cheniere and Venture Global have agreed to supply around eight billion cubic metres (bcm) per year under 20-year contracts with traders and governments in Central and Eastern Europe. That is equivalent to roughly 10 per cent of US LNG exports to the EU in 2025.
Those buyers have in turn signed non-binding import deals with European intermediaries to support the flow of LNG through these regions.
European leaders’ willingness to lock themselves into long-term gas contracts after spending over a decade speaking about the need to reduce fossil fuel consumption highlights Europe’s new reality: energy security concerns outweigh "decarbonisation" needs.
The success of the Vertical Gas Corridor is far from guaranteed. Cross-border tariffs between Central and Southern European countries remain prohibitively high. However, regional operators are proposing a new “super-bundled” agreement that would allow suppliers to reserve the entire corridor in a single contract.
Infrastructure bottlenecks also persist. LNG terminals lack sufficient storage, meaning underground facilities in Bulgaria and Ukraine would need to be expanded to enable large-scale flows.
Additionally, without EU financial support to cover the extra costs needed for transmission system operators to upgrade the grid, Russian gas delivered via existing pipelines will remain cheaper, undermining diversification efforts.
Finally, for the Vertical Gas Corridor to function at scale, LNG must flow north from Turkey. The country hosts substantial underutilised regasification capacity, totalling 58 bcm annually, based on my calculations using data from Argus, enough to increase US LNG supply to Europe by an estimated 70 per cent.
Around half of that capacity could potentially be used to ship volumes along the Corridor to Ukraine and Central Europe.
In practice, however, Russian gas still occupies a significant share of Turkish transit capacity through TurkStream. And in an increasingly fractured geopolitical world, Turkey may be unwilling to align with the interests of Europe and the US, especially if the financial incentives still make the alternative more attractive.
The US has framed its LNG exports as essential to Europe’s economic security, industrial growth, and even its emerging infrastructure demand – and the conflict in Iran has shown that, under current circumstances, that is probably correct.
Some may question whether deepening this dependence is prudent, especially given America’s decision to pursue the war in Iran despite knowing the potential disruption it could cause to the global energy system.
But Europe has few other options, and reducing Moscow’s influence over those EU economies most exposed to political and economic pressure may be worth the risk.
(Writing by Martin Vladimirov; Editing by Marguerita Choy)