Azerbaijan's Pipeline Gas Takes Center Stage in Europe's Energy Security

The European Union's gas market is facing new challenges due to the ongoing geopolitical tensions in the region. Despite having no immediate physical gas crisis, the market is experiencing growing tension, with Dutch TTF October gas futures rising by 4.4% to €69.9 per megawatt-hour on August 31.

The EU's reliance on Russian gas has significantly decreased since Russia's invasion of Ukraine in 2022. In 2021, Russian pipeline gas accounted for around 40% of EU pipeline gas imports, but by 2025, this share had fallen to approximately 6%, while the combined share of EU gas imports from Russia stood at around 12%. The European Union has now moved towards eliminating Russian gas altogether, with a ban on Russian LNG and pipeline gas imports scheduled to take effect through 2026-2027.

Azerbaijan is emerging as an important player in Europe's energy security due to its stable pipeline supply route that bypasses some of the world's most dangerous geopolitical chokepoints. The Shah Deniz field, which supplies around 10 billion cubic meters of gas annually to European consumers through the Southern Gas Corridor, has become a valuable asset for Azerbaijan.