Relations between Russia and Armenia, which today can fairly be described as “complex-strategic,” are increasingly prompting experts to predict a difficult winter and an energy deadlock for Armenia. Concerns are therefore already being raised about possible problems with supplies of gas and fuel for the nuclear power plant, with scenarios involving a complete suspension of supplies also being discussed.
Nevertheless, for now the issue may only concern a possible revision of the terms of the agreement under which Armenia receives natural gas, petroleum products and diamonds on preferential terms.
Russia has always had the option of using price leverage. If Gazprom now decides to abandon the preferential rate — currently $177.5 per 1,000 cubic meters — the Armenian side would suffer significantly.
Even if the gas price does not immediately rise to European levels, but Armenia instead begins purchasing gas at the price at which Gazprom sells it to Georgia, this would still place a serious burden on the final consumer’s budget.
With a border price of $177.5, the final consumer pays AMD 143.7 for gas, which, calculated per 1,000 cubic meters, is twice the initial cost.
This is because pricing is affected by both the 20% VAT and the high cost of maintaining gas pipeline infrastructure. In other words, any price increase creates serious pressure, which in itself represents a fairly effective lever in political negotiations.
Therefore, suspending gas supplies would be impractical and even pointless.
Moreover, the sole operator of Armenia’s domestic gas distribution network and its main supplier is Gazprom Armenia, formerly ArmRosGazprom, a wholly owned subsidiary of Gazprom.
Stopping supplies would mean depriving yourself of profits generated by your own asset.
Armenia’s leadership understands this as well and is therefore preparing for a possible increase in gas prices.
Finance Minister Vahe Hovhannisyan said in an interview with Shant TV that the Armenian government had calculated the possible consequences of an increase in the price of Russian gas, although he did not provide specific figures.
Armenia Cannot Quickly Replace Its Russian Gas Supplier
The gas situation would be different if gas coming from Iran did not flow through a pipeline with limited capacity, or if there were an opportunity to organize alternative gas supplies from Azerbaijan.
However, the latter would require, at a minimum, restored infrastructure and, at most, a final peace agreement.
Neither exists yet.
Therefore, the current status quo will remain in place, since it is not in Russia’s interest to “turn off” the gas, while Armenia cannot quickly replace its supplier.
No Catastrophic Scenario Is Expected at the Nuclear Power Plant Either
As for the nuclear power plant, there is no reason to expect a disaster here either.
First, Rosatom and all of its entities are not leaving the plant. On the contrary, they are extending their presence.
On April 1, the second power unit was shut down for 153 days, until September, to carry out scheduled work as part of the program to extend its operating life until 2036.
This was done, among other reasons, to prevent any emergency situations during the winter.
Experts’ pessimistic scenarios are based on warnings that at some point the Russian side could refuse to supply the next batch of fuel.
However, it should not be forgotten that back in 2017 Rosatom’s TVEL fuel company secured a two-year stock of nuclear fuel at the Armenian Nuclear Power Plant, and that stock is periodically replenished.
In fairness, a two-year fuel reserve and the extension of the NPP’s operating life until 2036 are far from a solution to the problem. They are a means of postponing it.
This situation certainly eliminates panic, but not dependence.
This is also why there is discussion about the need to find alternative fuel.
However, switching a Soviet-designed VVER-440 reactor to fuel from another manufacturer cannot be done easily or quickly.
Taking Ukraine as an example, negotiations and the process of introducing US-made Westinghouse fuel for Ukrainian VVER-1000 reactors took eight years.
Therefore, even if Armenia decides today to reduce its dependence on Rosatom, this is a matter of years, not preparation for this winter.
Diversification Is Already a Reality in Petroleum Products
The only energy sector where diversification is no longer merely a subject of discussion but an established fact is petroleum products.
Yerevan already has a functioning alternative in this area.
Azerbaijan, with transit through Georgia, supplies petroleum products, including diesel fuel, and the volumes are increasing.
Nevertheless, Russia still dominates the market.
Taking these circumstances into account, Armenia will not face an energy blackout, but pressure on the economy will increase.
A gradual increase in gas prices — natural gas accounts for approximately 58–60% of the country’s total energy balance — would, on the one hand, not be perceived as aggression and, on the other, would leave room for bargaining on various issues.
Political Bargaining Is Already Underway
In reality, this bargaining is already taking place and is quite active.
Presenting the government’s new program for 2026–2031, Armenian Prime Minister Nikol Pashinyan spoke about the “transformation of partnership relations with Russia” and abandoned the term “Armenian-Russian strategic alliance.”
However, some time later, Armenian Foreign Minister Ararat Mirzoyan stated that Russia is more than a “strategic partner” for Armenia.
Moreover, the statement was made on Armenian television on the eve of a meeting between Russian President Vladimir Putin and Nikol Pashinyan in Bishkek.
Pashinyan himself assured Putin in Bishkek that both he personally and his government treat Armenian-Russian relations with great care and that he wants to deepen those relations.
The Armenian prime minister simply noted that the legitimate goal of any state should be to create an alternative for its people.
He is creating that alternative by adopting the law on launching the process of joining the European Union.
Nikol Pashinyan acknowledged to the Russian president that he understands a time will come when Armenia will have to make a specific choice between the EU and the Eurasian Union, but that time has not yet arrived.
“When and if an alternative emerges, then we will make a choice,” the Armenian prime minister said.
It can therefore be concluded that Yerevan is building an alternative not in order to sever ties with Moscow, but to gain the right to bargain with it as an equal.
Diana Nersisyan