Russia uses its energy export to the Western Balkans for both economic and political gains. The recently open section of the TurkStream delivers cheap Russian gas into the region, allowing Serbia energy security from the deal with Russia. However, the agreement makes Serbia more susceptible to future political pressure from Kremlin. Therefore, Serbia will have to diversify its energy supply to avoid this threat. With more political will from Belgrade, the country’s geographic position and commitment to the EU membership would make this endeavor a reality.
On January 1, 2021, a Serbian section of the TurkStream gas pipeline became operational with 13.88 billion cubic meters (m³) of gas set for annual delivery. Serbia will pay $155 per 1,000 m³ for Russian gas, a $30 price reduction compared to its previous delivery via Ukraine and Hungary. However, the price reduction might come with increased political pressure from Russia. On December 15, 2020, the Bosniak and Croat Presidency members refused to meet with the Russian Foreign Minister Sergey Lavrov during his visit to Bosnia-Herzegovina (B&H). The two Presidency members protested for Lavrov’s meeting with the Serb Presidency member a day before, where he endorsed the Serb-dominated entity’s resolution on military neutrality. The next day, B&H gas delivery had been reduced by 50%, apparently due to a technical error, which is highly unlikely as several other countries on the same pipeline experienced no halt in gas supply. To avoid a similar situation in the future, Serbia will have to diversify its energy supply by becoming more connected to the Krk liquefied natural gas (LNG) terminal, Trans Adriatic Pipeline (TAP), and East Mediterranean Pipeline (EastMed).
Croatia’s Krk LNG terminal became operational on January 4, 2021, with the technical capability of delivering gas to Serbia. In November 2020, TAP entered the active phase intending to reduce Serbia’s energy dependency from Russia. With EastMed completed by 2025, Serbia will have a chance to decrease energy dependence from Russia, increase market competition, and connect to the EU energy infrastructure. Once combined, these initiatives will create leverage against Russia’s TurkStream gas delivery, reducing its future political pressure on the country. By accepting to diversify its energy supply, Serbia will also strengthen the present positive business climate confirmed by the US Development Finance Corporation’s arrival to Belgrade and advance its overall geostrategic position among US, EU, and the Western Balkans partners.
Financially more attractive, Russian gas comes with a high political price, as demonstrated in the gas reduction case of B&H, where the country lost half of its supply overnight. While Serbia is entitled to cover its energy demand with more affordable gas from Russia, it should also be thinking about opening its market to other energy suppliers. Consequently, Serbia would have access to affordable energy supply free from Kremlin’s political pressure and in line with its aspirating EU membership.