Can Moldova and Armenia escape Russia’s orbit?

The breakaway Moldovan region of Transnistria—where most of the population hold Russian passports—is home to the Cuciurgan power station, where operations have now been halted due to the interrupted supply.

For 20 years, Transnistria got gas from Gazprom for 'free' (accruing the debt that Moscow now cites). It uses this gas to generate electricity, which Moldova bought at a reduced rate, compared to that supplied to the European market. With Gazprom's gas now gone, Moldova is having to buy much more expensive electricity from Romania, which will impact the rest of its economy. 

The European Commission has stepped in with around $250mn to "decouple Moldova from the insecurities of Russian supply of energy and fully integrate it in the European Union energy market". The money subsidises the cost of energy to the population of three million, with a $15mn budget for agrifood and manufacturing businesses, $50mn for investments in sustainable energy, and $60mn to support Transnistria.

Wine and votes

For the Kremlin, it may feel like history is repeating itself. In 2006, Russia banned Moldovan wine for seemingly political reasons. Given that 80% of the country's wine was exported to Russia at the time, this was a big blow. The next year the ban was lifted, but it was reinstated in 2013. 

Moldovan winemakers learned the lesson and pivoted their export markets. Today, EU states are their biggest customers—Russia accounts for only 10%. "Having to find new, more picky consumers has dramatically pushed up quality," said expert Justin Keay, explaining that around 20% of Moldovans now work directly or indirectly for the industry.

Having sought leverage over Moldova over wine, Russia only succeeded in pushing the country towards Europe. Is Russia pushing Moldova into European hands once again by withholding gas, or is the Kremlin rolling out another plan? 

In 2025, there will be major parliamentary elections in Moldova, and many suspect that Russia will try to interfere. Last year, the country held presidential elections, resulting in the narrow re-election of pro-European incumbent President Maia Sandu. The Foreign Ministry alleged "illegal and deliberate interference" by Russia at the last ballot. 

In December, Moldova's spy chief Alexandru Musteața said Russia's strategy "is based on political and electoral corruption, disinformation and manipulation, as well as street protests and unrest," adding that Moscow's tactics included vote-buying, with pro-Russian oligarch Ilan Shor named as part of the programme of political bribery.

In 2017, Tel Aviv-born Shor was convicted of money laundering and fraud but fled the country for Israel in 2019. In 2023, he was sentenced to 15 years in absentia for his role in a $1bn bank theft, and the pro-Russia political party that bears his name was banned. In 2025, Shor has reportedly been paying Moldovan households to subsidise their energy costs.

Building trade links

The Kremlin may be gambling that inflation (prompted by its gas withdrawal) fuels a wave of discontent that pushes the current pro-EU government out of power, making the European Commission's rescue package important. It is also reflective. Whereas Russia now accounts for less than 4% of Moldova's foreign trade, the EU accounts for 54% and provides 87% of foreign direct investment in the country. 

Beyond trade and investment, Moldova and Europe are building physical links, too, not least with the Vulcănești–Chișinău transmission line, due to be completed later this year at a cost of around $60mn, which will help Moldova move further away from Russia on energy. 

At this rate, Moldova's Gazprom contract—which is due to end next year—is unlikely to be extended. Analysts wonder therefore whether this may now be an opportunity for Moldova and Transnistria—whose population may feel abandoned by Russia—to seek a common European future.

Armenia and Russia

The situation with Armenia is very different. The government in Yerevan began to criticise its security relationship with Russia after the 2020 War in Nagorno-Karabakh, when Azerbaijani troops entered Armenian territory, with no response from the CSTO (a NATO-like body headed by Russia).

Unlike Moldova's economy today, Armenia's economy seems inextricably tied to Russia. At the end of 2024, both countries' deputy prime ministers said bilateral trade had almost doubled from 2023, to $10.9bn. Russia now accounts for about 40% of Armenia's exports, and Russian companies own strategic infrastructure in Armenia, including the railway network and gas distribution system. 

Conversely, the EU's share in Armenian exports is only around 7.5%, yet something seems to be shifting. The Armenian Prime Minister recently endorsed the introduction of a bill calling for the "start of a process of Armenia's accession to the EU," saying it reflected the desire of Armenians for the future of the country. 

In terms of bilateral trade, Armenia's Finance Minister Vahe Hovhannisyan said that the recent increase was largely linked to re-exports. Two of the three mobile operators in the country used to be owned by Russian companies, but they are now in Armenian hands. Likewise, petroleum imports used to come through Russian companies but the likes of Shell and Gulf have entered the Armenian market in the past two years.

Europe vs Russia

Russia has been very clear: European integration is incompatible with Armenia's membership in the Eurasian Economic Union (EEU). For Armenians, the tug-of-war between Russia and Europe feels familiar. 

Many recall the unexpected news in September 2013 when then President Serzh Sargsyan suddenly announced his decision to join the Customs Union (the EEU's precursor) even though Armenia had been negotiating an Association Agreement with the EU for four years by then. 

At the time, he hinted that there were security concerns behind his decision, linked to the 150,000 Armenians living in Nagorno-Karabakh, an unrecognised republic that maintained close ties with Armenia, but this is no longer a factor following the 2020 war there and the forced displacement of its Armenian population in 2023. 

Ever since, Armenia has diversified its security options, freezing its membership of the CSTO and buying weapons from France and India, rather than relying solely on Russia for its defence equipment, as it did in the past.

Economically, the World Bank approved its 2025-29 partnership strategy for Armenia, outlining up to $1.7bn in support for sustainable growth, including infrastructure. For the last five-year period, it committed only $400mn. The International Finance Corporation (a member of the World Bank Group) plans up to $700mn in additional investments.

The newly established Foreign Intelligence Service of Armenia published its first report this year, citing sanctions on Russia as a major challenge for Armenia's economy, noting Armenia's energy dependence, and adding that this "continues to be a widely used tool of political influence"—a veiled jab at Russia. 

It noted Armenia's upcoming general elections in 2026 and that "some countries will try to use Armenia's economic dependence for political influence in a more accentuated and obvious way as an opportunity to interfere into Armenia's internal affairs and influence broad segments of the public".

Seeking to strike out

The Armenian government is betting on a peace treaty with Azerbaijan that could also allow normalisation of relations with Türkiye, and possibly the opening of their shared border, which has been closed since 1993 amid the war in Nagorno-Karabakh, in which Ankara supported Azerbaijan. That would ruffle feathers in the Kremlin, which wants to keep Armenia within its sphere. 

In both Moldova and Armenia, Russia sees itself as the 'big brother' that seeks to retain influence and control. Yet for years, Moscow's military interventions in the territory of its neighbours have been limited out of concern about America's reaction. With Donald Trump back in power and Ukraine seemingly abandoned as a result, Putin need not be concerned about Washington.

If Trump decides that Russia should keep this sphere of influence, then both Moldova and Armenia could be pulled—by circumstance and lack of options—reluctantly back into Russia's orbit, ending their 21st century ambitions for economic independence, for now at least.