Germany, also called Europe's economic engine, is reeling under severe manufacturing strain. The country's growth has stagnated in recent years. High energy costs have compounded the issue. Since 2022, Industrial gas prices have surged by 30 per cent, forcing manufacturers to seek alternatives. 

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This coincides with the time when Europe collectively decided to look past Russian gas supplies. Germany was once fuelled by this cheap pipeline gas, but is now seeing a decline in industrial output to the tune of 5 per cent. 

A 'divided' Germany

The quest for Russian gas is restricted to the East. While Western Germany has somewhat adapted to higher LNG costs, industries in the East are calling for the return of Russian gas. Chemical hubs argue that lower gas prices are essential for economic stability. This contrasts with the broader EU sentiment of phasing out Russian energy by 2027 due to security concerns.

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For many German leaders, resuming Russian gas imports is not even a discussion. Major companies have taken a hard stance, with key European buyers already cutting ties with Gazprom. However, in East Germany, some voices argue that a peace deal could shift energy policy, which could be a welcome change for struggling German industries.

Can Russian gas make a comeback in Germany?

Restarting Russian gas flows to Europe won't be easy, even if peace is achieved. Europe has invested heavily in LNG infrastructure, with major deals signed with the US, UAE, and other global suppliers. Meanwhile, experts warn that LNG remains up to 50 per cent more expensive than Russian pipeline gas. This dilemma is set to take centre stage as politics around Russia-Ukraine war heats up.