Atlantic Council GLOBAL ENERGY CENTER
ISSUE BRIEF
Caspian contributions to energy security in Europe JULY 2024 JOHN ROBERTS AND JULIAN BOWDEN
Introduction
Amid Russia’s all-out invasion of Ukraine and weaponization of natural gas exports to Europe, the continent has successfully increased its non-Russian imports of fossil fuels and expanded renewable energy to improve its overall energy security. A crucial part of this strategy has been increasing liquefied natural gas (LNG) supplies from non-Russian producers, including the United States, Norway, and Qatar, but the need for diversified energy supplies continues. New gas developments in closer proximity from the Black and Caspian Seas have the potential to help Europe meet its demand for natural gas—in Southeast and Central Europe in particular—as it further reduces reliance on Russian energy. The Caspian holds the greatest potential for ramping up exports on the shortest timeline, but whether the region will actualize its planned developments remains uncertain. Three countries with Caspian coastlines—Azerbaijan, Kazakhstan, and Turkmenistan—possess considerable energy resources, already export oil and gas to European and Mediterranean markets, and, to varying degrees, are working toward expanding their contributions. Azerbaijan is making strenuous efforts to increase its gas exports to Europe as quickly as possible. There are also prospects for a limited increase in oil exports from Kazakhstan via Azerbaijan, and for Turkmenistan to contribute to Europe’s gas balance in the near term.
The Atlantic Council Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.
Despite the Caspian countries’ potential to help bolster European energy security, economic and geopolitical factors could hinder the rapid production and export of additional supplies from the region. Raising finance for oil and gas production and transportation has become difficult, as international financial institutions (IFIs) seek to limit financing for fossil fuel projects and the European Commission increases energy transition investments in renewables and green hydrogen. Moreover, while proposals on both sides of the Caspian for large-scale hydrogen export projects targeted at European markets are ambitious, the complexity of delivery means they may take years to mature. Azerbaijani and Georgian proposals for large-scale, renewables-generated electricity exports to the EU are technically simpler to deliver, and these are now the focus of steady attention.