John Jefferson
The incoming administration has offered strong indications in recent weeks that it is serious about pursuing a settlement to finally end the calamitous war in Ukraine, now entering its third year. But the difficult yet necessary task of bringing the most dangerous conflict on the European continent since 1945 to a close demands a willingness by U.S. policymakers to grapple not just with the military realities unfolding on the battlefronts in Ukraine since 2022, but with the larger geopolitical dynamics that have driven the confrontation between Russia and the West since the end of the Cold War. Prime among these is a longstanding dispute over European energy security that has found the U.S., Russia, and various European states on opposing sides.
These energy wars, if left unaddressed, threaten to cripple Europe for decades to come. But they also present opportunities that can underwrite a sustainable European security order in a way that benefits long-term U.S. interests.
The European energy wars are driven by two dueling forces. First, there is the economics of it. Russia is one of the world’s largest energy exporters, and Russian energy products are innately attractive to European energy importers due to persistent market factors including low prices, simplified logistics, and relative abundance of Russian gas. Germany’s postwar ascendance as a global economic powerhouse, not to mention the industrial beating heart of Europe, was fueled by a continuous supply of cheap Soviet and then Russian gas. This arrangement was not only hugely beneficial for Germany but has underwritten the solvency of the entire European project to a degree that cannot be overstated.
But the clear economic benefits of doing business with Russia have always been interlaced with geopolitical concerns emanating from some voices in Washington and NATO’s eastern flank countries; chief among them the argument that Russia’s role as Europe’s major energy supplier renders the EU dependent on Moscow. How exactly this supposed dependence works has never been fully explained, let alone proven. The notion that Moscow can blackmail European leaders into doing its bidding simply by threatening to shut off pipelines into Europe is one of those pyrotechnically impressive ideas that crumbles even under the lightest scrutiny. Gazprom, the Russian state-owned energy giant, cannot renege on a long-term gas contract because of some political disagreement between the Kremlin and Europe without incurring massive financial losses, taking a credibility hit with its other key trading partners like China, and being severed from a highly lucrative European market.
Nevertheless, these two forces—economics and geopolitics—came to a head with the 2022 Russian invasion of Ukraine, spurring Europe to pursue a complete and costly divestment from Russian energy as part of the international sanctions regime imposed on Moscow. It is tempting to conclude that Russia’s total isolation from European energy markets is good for U.S. interests and should continue in perpetuity, but there are additional layers of complexity with which American policymakers will need to grapple after the Ukraine crisis is over.
The U.S. needs a strong EU ally capable of taking greater charge of its own defense, something President-elect Donald Trump is rightly seeking as part of his larger initiative to renegotiate the terms of U.S. engagement with NATO. Yet the current approach, hailed by the Biden administration as a great victory of transatlantic unity, has normalized a state of affairs wherein Europe is more impoverished and less secure than at any point since the EU was founded.
What will it take to reverse this trajectory of decline? It is difficult to the point of infeasibility for the EU and its principal actor, Germany, to recover from its ongoing economic slump, much less sustain long-term economic growth, without repairing to some kind of functioning energy relationship with Moscow. Russia will not be reintegrated into European energy markets while the war is ongoing, but impending peace talks over Ukraine give the Trump administration and European leaders a chance to pursue what Henry Kissinger referred to as linkage-making diplomacy.
The prospect of energy normalization between Russia and Europe isn’t just good for European economies—itself no small boon in light of the EU’s economic death spiral—but is one of the West’s major sources of leverage in negotiating an end to a war that Russia is winning. Russia has ably adapted to Western energy sanctions, in part by greatly boosting energy exports to third countries like India that sell refined Russian crude back to Europe at a markup. But there is little question that Moscow would prefer to transact with European customers directly. Discussing these questions as part of a broader framework for relaxing certain sanctions after the war is diplomatically and economically sound.
Any proposal along these lines is sure to run up against the argument that walling Russia off from European energy markets is good because it clears the way for unfettered exports of American LNG Liquefied natural gas (LNG) across the Atlantic. This view fails to reckon with the reality that, while the U.S. can and should advertise its energy products to Europe, it cannot possibly export enough LNG at low enough prices to cover the market share previously occupied by Russian gas. Letting Europe diversify its energy imports would dampen the tension between maximizing LNG exports to Europe and servicing growing demand for LNG at home, advancing Trump’s goal of reducing energy prices for American consumers. It’s also good geopolitics—allowing Russia to reestablish its energy trade with Europe would bite into Moscow’s growing reliance on its Chinese trading partner, adding distance to a Russia-China economic relationship that has soared to new heights as a result of sanctions imposed on Russia by the Biden administration.
Though the current EU leadership speaks of divestment from Russia as a permanent approach, it is easy to imagine that the economic realities which prompted European states to establish a decades-long energy relationship with Russia in the first place will slowly reassert themselves in the coming years as the tremors of the Ukraine disaster recede into the rearview mirror.
The U.S. has a unique opportunity to preempt this development not by strong-arming Europeans into acting against their economic self-interest, but by restarting the Russia-Europe energy trade on terms that benefit the U.S. One approach would be to simply buy Nord Stream 2, a pipeline project between Russia and Germany nixed by Berlin in response to Russia’s invasion. This could accomplish two critical U.S. goals: American entities would receive transaction fees for Russian gas that flows into Europe, allaying concerns of losing market share to the Russians; and U.S. ownership over the pipeline would allow Washington to impose inherent boundaries on Russian geoeconomic influence, conclusively putting to rest any concerns over European “dependence” on Russia. These two benefits, in tandem, have the potential to permanently end the European energy wars on terms beneficial to U.S. economic and security interests.
Trump was correct in noting the political schizophrenia of European elites who demand American military protection from Russia even as they guzzle hundreds of billions of cubic meters of Russian gas. But the solution is neither to tolerate Europe’s complete and permanent security dependence on the United States, something the Trump administration rightly seeks to upend, nor to insist on an economically suicidal energy divestment between Europe and Russia. There is a middle course—one that promotes long-term European stability while advancing American interests—ripe for the taking, and upcoming negotiations over Ukraine provide a generational opportunity to work toward a stable, sustainable transatlantic order that promotes American and European prosperity.
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