Russia's invasion of Ukraine in 2022 shook European energy policy, making independence from Russian resources a top priority. For the Western Balkans — Albania, Bosnia and Herzegovina (BiH), Kosovo, Montenegro, North Macedonia, and Serbia — this is a formidable challenge and a strategic gambit of sorts.

A report by the Brussels-based think tank Bruegel analyzes these challenges, emphasizing that although the region is integrated with the EU (up to 70% of electricity flows are EU transit), it is clearly lagging on reforms and risks isolation.

The Western Balkans, aspiring to EU membership, must break free from Russian dominance in the energy sector. Nevertheless, Serbia and BiH remain dependent on Russian oil and gas. In Serbia, the NIS refinery in Novi Sad (1.6 million tonnes per year) is 56% Russian-owned (Gazprom Neft 44.8%, JSC Intelligence 11.3%), which creates the risk of Kremlin influence. U.S. sanctions imposed in October 2025 halted production, depriving NIS of a key client — Croatia's JANAF. This is a blow to Serbian transport and the economy, requiring either nationalization or EU investment; Hungary's MOL has expressed interest in the refinery.

In BiH, the Brod (1.2 million tonnes) and Modriča (69,000 tonnes) refineries are 92% owned by Russian companies (NeftGazinKor, Nestro Petrol). Financial losses make them vulnerable to manipulation. Serbia imports 2 billion cubic meters annually via TurkStream, BiH 0.3 billion cubic meters through Serbia, and North Macedonia has replaced Russian gas with Azerbaijani supplies. Albania, Montenegro, and Kosovo do not import Russian gas.

In 2024, electricity exports from the Balkans to the EU totaled 10 TWh, while imports stood at 5 TWh. Wholesale prices in the region (50–70 euros per MWh) are lower than in the EU (80–100 euros per MWh). The region burns primarily lignite (Kosovo 95%, Serbia 65%). Hydropower dominates in Albania (98–100%), even though the country's solar energy potential exceeds that of most EU members.

Western Balkan countries benefit from energy cooperation with the EU primarily through supply security, cost savings, and CO2 emission reductions achieved via energy market integration (market coupling). This reduces exposure to Russian fossil fuels, minimizing the risk of energy blackmail and building trust.

The EU has invested significantly in the Western Balkans' energy sector. Under the Growth Plan (2024–2027), it has allocated up to 6 billion euros for reforms, including energy. The European Investment Bank (EIB) disbursed 693 million euros for projects in the region in 2024. In addition, the energy support package amounts to 450 million euros. For Serbia alone since 2000, more than 1 billion euros in grants have been provided. In total, EU investments in renewable energy and infrastructure run into the billions, with the prospect of 20 GW of additional capacity by 2040.