How Will Moldova Get Through the Upcoming Cold Season?

Caught at the intersection of international sanctions regimes, regional conflicts, and the incompetence of certain managers, Moldova is entering yet another zone of uncertainty right on the threshold of the cold season

The key trigger of the current instability has been the situation surrounding the foreign assets of the major Russian company LUKOIL, which for many years has been one of the system-forming operators on Moldova’s fuel market. The sanctions imposed by the United States last month extended not only to the parent company but also to all of its subsidiaries, including those operating in our country and in neighboring states. This step has automatically called into question the functioning of hundreds of gas stations, logistics chains, and, critically, the infrastructure responsible for supplying fuel to the capital’s international airport. At the same time, it is important to understand that for decades our country has relied heavily on imported petroleum products. To grasp the extent of this dependence: 41% of final energy consumption comes from this source. By comparison, natural gas accounts for around 15%, making the oil sector a key node of energy vulnerability. The presence of large storage facilities, basic infrastructure, and extensive networks of gas stations in the country – quietly controlled by a Russian company – created an illusion of stability. But the sharp impact of sanctions instantly exposed the fragility of the existing model. In principle, this is a typical example for Moldova, where under the label of a “stable system,” no one dares look behind the façade. This situation has also become yet another clear example that the countless statements by our politicians about “the complete and final energy liberation of Moldova from Russia” are nothing more than a fiction. As it turned out, up until October of this year, a significant share of Moldova’s oil market remained tied to supplies from a Russian subsidiary. And this state of affairs would likely have continued had it not been for the sanctions. Another indicator of the fuel market’s vulnerability has been the gradual rise in gasoline and diesel prices. According to NARE, this increase began immediately after the United States announced restrictions against Russian oil companies. This comes as no surprise: Moldova’s fully import-dependent market felt the impact of this decision instantly, with the rise in diesel prices being particularly noticeable. An additional layer of complexity arose from the urgent need to sell off LUKOIL Moldova’s assets in order to shield them from sanctions-related risks. A major Swiss energy corporation with an extensive international portfolio emerged as a potential buyer. However, there was a risk that the assets could then be resold to third parties. As a result of negotiations, the authorities temporarily took control of the oil terminal at Chisinau Airport under a lease agreement to ensure uninterrupted kerosene supplies for the aviation sector. At the same time, contacts with Romania were intensified, as it also expressed readiness to take control of Russian-origin assets on its territory in order to comply with sanctions and maintain uninterrupted operation of its refining capacities. For our government, this creates additional room for maneuver, allowing it to secure at least a minimum volume of petroleum imports in the event of another force majeure. However, the oil sector is only one piece of the energy puzzle taking shape on the eve of the winter season. The gas situation in the region, including developments along the Ukrainian route, remains no less alarming. Our authorities have become actively involved in promoting the “Vertical Gas Corridor” project, designed to secure alternative flows, primarily to supply Ukraine. Yet its prospects remain uncertain, even despite recent agreements between Athens and Kyiv on pumping liquefied natural gas. In a context where our neighboring country has lost up to 60% of its production capacity and is forced to seek new import routes, the situation will only worsen, as the Kremlin will try to make any deliveries to Ukraine (and consequently to us) as unpredictable as possible. The most recent example can be seen in the events of recent days near the Ukrainian port of Izmail, where a Russian drone struck an LNG tanker. The incident clearly shows that Kyiv is trying to diversify its sources and routes of gas imports, including through the Black Sea region, while Moscow is cutting off potential supply channels by force. For Moldova, this is by no means an abstract threat, as any disruptions in Ukraine’s energy logistics affect the entire regional energy system. Just yesterday it became known that the construction of the Vulcanesti-Chisinau overhead power line is nearing completion. Workers have finished installing the final pylon, laid the wires, and moved on to the final tasks before testing the line. However, this news cannot be viewed separately from the intensified Russian strikes on the energy infrastructure of southern Bessarabia. The main objective of these attacks is, of course, to weaken Ukraine’s energy resilience, particularly in the Odessa region. At the same time, it cannot be ruled out that Moscow is also seeking, in this way, to increase the strategic importance of the power plant it controls on the left bank of the Dniester. In this regard, one may assume that a separate signal is also being directed at certain audiences in Chisinau. Its message is that refusing to purchase electricity from MGRES could turn out to be a far riskier step than previously assumed. Such hints become especially clear against the backdrop of a potential threat of strikes on the Isaccea-Vulcanesti line (part of which runs through Ukrainian territory), which is one of the key routes for importing Romanian electricity. Equally troubling signals are coming from the Transnistrian region, where a gas-saving regime has begun. MGRES’s switch to coal indicates a shortage of natural gas supplies, while disruptions in the operation of local gas stations and industrial enterprises only add further risks to the overall energy landscape. Last winter showed that any sharp shift in the balance between right-bank and left-bank Moldova triggers acute political tension and the need to look for unconventional solutions. Our authorities are now faced with a key question: how capable is Moldova of getting through the coming winter without serious energy shocks, and are we once again heading toward the classic political season of “we could not have foreseen this”? Officials assure that gas reserves are sufficient, the market is more or less balanced, and supplies via alternative routes offset potential risks. But the real situation remains unstable, since the issue of LUKOIL’s assets is still unresolved, and a new escalation of the conflict in Ukraine, coupled with local accidents at energy infrastructure facilities in the Odessa region, could bring down the current fragile balance. Thus, amid the geopolitical and military-political turmoil, the likelihood of localized crises – fuel shortages, price spikes, or power supply problems – remains extremely high. Therefore, the successful passage of the heating season will depend not so much on official assurances of energy decoupling from Russia as on the authorities’ ability to quickly put out emerging “fires”.