As the Trump administration pushes to broker a peace agreement between Ukraine and Russia, analysts and traders are trying to assess how any potential deal might reshape Europe’s energy flows.
Reaching such an agreement is far from guaranteed. Major obstacles and disagreements remain, and Russia has yet to signal its stance on the proposal. White House envoy Steve Witkoff is set to visit Moscow next week to discuss the plan with the Kremlin, at a time when Russia appears reluctant to accept any arrangement that does not fully meet its demands.
Even if a deal were reached — which is not the base case for many market participants — it is unlikely to change Europe’s hesitation about returning to Russian energy, an exposure the bloc has spent years working to unwind. Most analysts agree that a “clean” ceasefire would not meaningfully alter Europe’s post-2022 stance.
The decision to abandon Russian pipeline gas has been costly for households and businesses across Europe. Energy bills and industrial expenses surged sharply. And more than three years after the start of the energy crisis that weighed heavily on living standards and competitiveness, the prospect of easier Russian flows is not generating much enthusiasm among EU capitals.
No way back
Russian gas is not banned in the EU — at least not yet. Under current plans, the bloc intends to phase out imports of Russian LNG by 2027.
But a peace deal is unlikely to reverse Europe’s long-term pivot away from Russian energy.
Europe also lacks an easy or quick way to restart Russian pipeline flows, even if peace were declared tomorrow. Nord Stream has been effectively destroyed. The Yamal–Europe pipeline has been idle since Poland terminated its contract. And the Ukraine–Gazprom transit agreement expires next year, with no political will on either side to renew it. Infrastructure, contracts, and politics all point in one direction — no swift return.
As Reuters columnist Ron Bousso wrote this week: “Even if sanctions on Russia’s energy sector were relaxed, European governments would be reluctant to re-embrace Moscow as a major supplier after the 2022 shock.”
In reality, most EU countries have received no Russian gas for nearly three years — and many have no intention of resuming dependence on the Kremlin, even under a fair peace settlement for Ukraine.
Gas prices remained relatively contained this year, staying within a narrow range despite storage sites filling at a slower pace than previous years ahead of winter. EU storage levels are currently roughly ten percentage points below last year’s levels and the five-year average. As of November 25, they stood near 77%, according to Gas Infrastructure Europe.
Despite lower storage, markets appear confident that Europe has enough supply for the winter, thanks to record US LNG exports, most of which are now heading to Europe.
Even if Russian pipeline gas magically returned, Europe has already rebuilt its entire supply system around LNG.
Strong LNG flows ease winter worries
The US exported 10.1 million metric tons of LNG in October, according to LSEG data reported by Reuters, becoming the first country ever to exceed 10 million tons in a single month. Venture Global’s Plaquemines project and higher output from Cheniere’s Corpus Christi Stage 3 helped boost volumes.
About 69% of US LNG exports went to Europe last month.
US LNG is set to grow further. The US Energy Information Administration (EIA) expects LNG exports to reach 14.9 billion cubic feet per day this year — up 25% from 2024 — and to increase another 10% by 2026. Faster-than-expected ramp-ups at Plaquemines have pushed the agency to raise its short-term forecasts.
More supply is coming globally as well. Qatar, the world’s second-largest LNG exporter, is pushing ahead with the largest expansion in its history, planning to boost export capacity by 85% by 2030.
This wave of supply is welcome news for Europe, especially as the EU moves to soften its proposed “Corporate Sustainability Due Diligence Directive” (CSDDD), which could have disrupted LNG flows and even imposed penalties on companies. Fears over security of supply have prompted policymakers to rewrite the proposal.
European gas prices have not experienced the sharp winter surges seen in past years. Instead, TTF benchmark prices in Amsterdam fell below €30 per megawatt-hour this week — the lowest in a year and a half — supported by strong LNG arrivals, mild weather, and talk of a potential Ukraine peace deal.
In another sign of supply comfort, France’s TotalEnergies will remove its Le Havre floating storage and regasification unit (FSRU), installed in 2022 as an “emergency backup.” The company said the facility is no longer needed.
Portfolio managers are also increasingly positioning for lower prices. Speculators have shifted from net-long to net-short on TTF futures for the first time since March 2024, according to ING.
ING analysts Warren Patterson and Ewa Manthey noted Thursday: “Once again, the move was driven by new short positions, pushing total shorts to another record high.”
They warned, however, that such large short positions carry significant risk if supply or demand delivers surprises during the winter.
