Rising Russian Gas Exports via TurkStream and the Fragile Balance of European Energy Security

The European energy landscape in 2025 is defined by a paradox: while the EU has aggressively pursued de-risking strategies to reduce reliance on Russian gas, a modest resurgence in TurkStream exports has reignited concerns about the fragility of these efforts. Russian gas exports via TurkStream increased by 6.8% in the first half of 2025 compared to the same period in 2024, delivering 7.8 billion cubic meters (bcm) to Europe. This rebound, however, is a far cry from the 63.8 bcm peak in 2022 and remains overshadowed by the broader 47% decline in total Russian gas exports to Europe in 2025. Yet, the persistence of TurkStream flows—despite Western sanctions and the end of gas transit through Ukraine—underscores the enduring challenge of energy security in a fractured geopolitical order.

The TurkStream Resurgence: A Fleeting Reprieve or a Strategic Gambit?

TurkStream's resilience in 2025 is driven by a combination of geopolitical maneuvering and logistical realities. The pipeline, which bypasses Ukraine, has become Russia's primary conduit for European gas exports, accounting for 16% of its total shipments in Q2 2025. Daily flows fell to 37.6 million cubic meters (MMm³) in June 2025, down from 46 MMm³ in May, due to planned maintenance. However, the 6.8% year-on-year increase in 2025 highlights Russia's ability to exploit gaps in European energy markets, particularly as the EU struggles to replace lost Russian volumes with alternatives.

The pipeline's significance is magnified by its role in sustaining Gazprom's cash flow. Despite a 21% quarterly drop in TurkStream exports in Q2 2025, the company's internal forecasts project cumulative losses of up to 15 trillion rubles ($195 billion) over the next decade if export opportunities do not improve. This financial strain is compounded by the underdevelopment of Russian LNG infrastructure, which has hindered its pivot to Asian markets. For investors, this creates a paradox: while TurkStream's continued operation signals Russia's adaptability, it also reveals the limits of its long-term competitiveness in a global energy market increasingly dominated by LNG and renewables.

EU De-Risking Efforts: Progress and Persistent Vulnerabilities

The EU's de-risking strategy—centered on diversification, storage, and strategic partnerships—has made significant strides. U.S. LNG now accounts for 55.5% of EU imports, up from 43% in 2024, while Norway's pipeline gas remains a critical stabilizer. Norwegian exports reached 338.3 MMm³ per day in early August 2025, demonstrating the country's role as a reliable swing supplier. However, Norway's natural gas production is projected to decline by 5% in 2025 due to field depletion, raising questions about its ability to maintain high export levels in the long term.

The U.S.-EU trade deal, which includes a $250 billion annual energy procurement target, has further entrenched U.S. LNG in European markets. Yet, this ambition is at odds with logistical constraints. U.S. LNG exports to the EU hit 35.6 million tonnes in 2025, but achieving the $250 billion goal would require a 60% increase in volumes or prices, which appears unfeasible given global oversupply and falling LNG prices.

Resilience of Alternatives: U.S. and Norway in the Crosshairs

The U.S. and Norway's ability to sustain their roles as alternative suppliers hinges on infrastructure resilience and market dynamics. The U.S. is expanding LNG export capacity by 50% in 2025, with new facilities like Plaquemines LNG and Corpus Christi Stage 3 coming online. However, unplanned outages at Sabine Pass and geopolitical competition from Qatar and Australia pose risks. Meanwhile, Norway's maintenance schedule for 2025 is more favorable than 2024, with fewer planned interruptions, but its production decline remains a critical vulnerability.

Investment Implications: Energy Infrastructure and Sanctions Enforcement

For investors, the key opportunities lie in energy infrastructure and sanctions enforcement mechanisms. The EU's push for energy security has spurred demand for gas storage facilities, with projects like the Matterhorn Express Pipeline (2.5 Bcf/d capacity) addressing regional bottlenecks. Midstream operators such as Kinder Morgan and Energy Transfer are well-positioned to benefit from U.S. LNG infrastructure expansion.

Sanctions enforcement remains a double-edged sword. While Western sanctions have crippled Gazprom's profitability, they also create regulatory risks for alternative suppliers. The EU's methane monitoring regulations, for instance, require U.S. LNG exporters to adopt cleaner practices to access the European market. Investors must weigh these compliance costs against the long-term potential of energy transition projects, such as green hydrogen and carbon capture.

The Long Game: Energy Diversification and Strategic Hedging

The EU's energy strategy is a work in progress. While TurkStream's resurgence highlights the difficulty of fully decoupling from Russian gas, it also underscores the importance of accelerating diversification. Investments in regional power generation, grid modernization, and renewable energy are critical to reducing reliance on imported fossil fuels.

For investors, the path forward requires balancing short-term exposure to LNG infrastructure with long-term bets on energy transition technologies. Hedging against geopolitical risks—such as potential export curbs in Norway or U.S. LNG supply disruptions—will be essential. The EU's decision to raise winter storage targets to 50% in 2025 reflects this strategic shift, but sustained investment in storage and renewables will determine the continent's true energy resilience.

Conclusion: A Delicate Equilibrium

The 2025 energy landscape reveals a Europe at a crossroads. TurkStream's modest resurgence is a reminder that geopolitical dependencies are hard to break, even in the face of sanctions and market shifts. Yet, the EU's progress in diversifying its supply base and investing in infrastructure offers a counterpoint to these challenges. For investors, the key is to navigate this delicate equilibrium—capitalizing on the immediate opportunities in energy infrastructure while aligning with the long-term trajectory of decarbonization and geopolitical resilience.

As the EU continues to recalibrate its energy strategy, the interplay between Russian persistence, U.S. LNG ambitions, and Norwegian pragmatism will shape not only market dynamics but also the broader geopolitics of energy. Those who can anticipate and adapt to these shifts will find themselves at the forefront of a rapidly evolving sector.