Western Balkan countries trade

Data from the European Union Agency for the Cooperation of Energy Regulators show that Russia’s energy influence is greatest in Serbia, North Macedonia and Bosnia and Herzegovina, where it supplies close to 100 % of gas needs and owns several assets, such as the Lukoil petrol stations network. (Russian Gazprom’s South Stream pipeline would have consolidated Moscow’s dominance of gas markets, but it was abandoned in December 2014 after the European Commission ruled that it contravened EU legislation). On the other hand, Kosovo, Montenegro and Albania currently consume little or no Russian gas, and future supplies are likely to come from Azerbaijan rather than Russian fields, via the Trans-Adriatic Pipeline (TAP). Montenegro will probably have to wait several years before the connecting Ionian-Adriatic Pipeline (IAP) is put in place. The IAP is intended to carry natural gas from Albania’s Fier via Montenegro and Bosnia and Herzegovina to Split in Croatia. The 520 km-long pipeline would be bi-directional and have an annual capacity of 5 billion cubic metres. The Western Balkans Investment Framework estimates that building the 94 km-long IAP in Montenegrin territory will cost €207 million. In Fier, the IAP would connect to the TAP, built to transport natural gas from the Shah Deniz II field in Azerbaijan to Europe. The first deliveries of Azeri gas to Italy via the TAP were made in 2021. In North Macedonia, Azeri gas is expected to start competing with Russian supplies by the end of 2023, when the link from Nea Mesimvria in Greece is scheduled to be completed. Outside the energy sector, where Russia’s presence is gradually declining, Russia’s economic presence through trade is dwarfed by that of the EU-27 (see Figure 2). However, experts caution that Russia’s major presence in strategic sectors is making the region’s governments vulnerable to its pressure and accentuating the risk of state capture.