Nearly all flows from Russia to the bloc stopped earlier this month when Kiev terminated its transit deal with Moscow
The loss of Russian gas could cost the EU over €1 trillion ($1 trillion), according to Kirill Dmitriev, chief executive of the Russian Direct Investment Fund (RDIF). Speaking at the Future Minerals Forum in Saudi Arabia on Thursday, Dmitriev said the EU’s economic growth had slowed significantly since halting Russian gas imports, while Russia’s economy continues to demonstrate resilience.
Following the escalation of the Ukraine conflict in 2022, the EU prioritized reducing its reliance on Russian energy. Some members voluntarily stopped importing Russian gas, while others, such as Austria, Slovakia, the Czech Republic, and Italy, continued gas imports from the country. However, these flows ceased earlier this month after Kiev refused to renew its gas transit deal with Moscow.
“Europe is suffering from not receiving Russian gas, with expected losses of more than €1 trillion,” Dmitriev stated. He previously attributed these losses to the high cost of liquefied natural gas (LNG), which the EU has imported in greater quantities to replace Russian supplies.
Dmitriev added that neither losing the EU as a gas buyer, nor sanctions aimed at destabilizing the Russian economy, have had a significant effect on it, while the EU has borne the brunt of the economic fallout.
“The Russian economy is in good shape, with growth expected at 4% by the end of 2024, while Europe showed 1% or less. If one looks at the overall attempts to limit the Russian economy, 4% growth does not look so bad,” he said. The RDIF chief projected a potential slowdown in Russia’s growth to 2-2.5% next year but stressed that the outcome would depend on the central bank’s monetary policies, which he described as “critical for the continued growth of the Russian economy.”
Despite extensive international sanctions placed on Russia in connection with the Ukraine conflict over the past three years, the country’s economy has adapted effectively, according to many observers. The International Monetary Fund (IMF) recently raised its 2024 growth forecast for Russia to 3.6%. In contrast, the body downgraded its growth outlook for the euro area to 0.8%.
The EU, meanwhile, has been facing sluggish economic growth and energy challenges. The loss of Russian gas has forced member states to turn to more expensive alternative energy sources, and the shift has driven up costs for businesses and households, strained manufacturing sectors, and fueled inflation. The European Commission recently reduced its 2025 growth projection for the Eurozone to 1.3%. Germany, the bloc’s largest economy, recorded its second consecutive year of contraction in 2024, a first in over two decades, the federal statistics office Destatis revealed earlier this week.
