The Euro Zone is addicted to Russian fossil fuels, but a Russian strike on Ukraine could compel it to stop using them.
Cold Leverage Threatens to Cut Europe Off
This has prompted a rush to seek alternate supplies and determine how long the bloc can live on the gasoline it has on hand.
“The United States and European Union are starting to work together to ensure an ongoing, adequate, and opportune supply of natural gas to the EU from a variety of sources around the world.”
“This is in order to avoid price fluctuations, including those that might stem from a fresh Russian invasion of Ukraine,” said US President Biden and President of the European Commission Ursula von der Leyen on Friday.
As per a senior EU official, Von der Leyen addressed extra gas imports with Qatar’s emir on Thursday and will continue on Tuesday.
When EU Energy Director Kadri Simson arrives in Baku on Friday, she is anticipated to raise the issue of growing Azerbaijani flows. On February 7, the US-EU Energy Commission will convene to discuss energy sources.
With all of the negotiations underway, here are five things to know about how the EU can try to substitute — or survive without — Russian gas supplies, which have historically accounted for roughly 40% of EU consumption.
How does the Nord Stream 2 pipeline fit into Ukraine-Russia crisis? https://t.co/Bui3a2G6Yf
— BBC News (UK) (@BBCNews) January 31, 2022
A complete shutdown of gas supplies is still improbable.
Mike Fulwood, senior researcher at the Oxford Centre for Power Systems, said, “It is quite improbable that Russia will restrict flows to Europe; they gain a lot of money from it.”
“Even if they are relatively well-off and could take the loss for a period, it would jeopardize their reputation as a dependable provider.”
However, the West’s growing inclination to impose sanctions on the Russia-Germany Nord Stream 2 project, or cut Moscow off from the SWIFT global financial transaction network, could alter that assessment.
“If the West withdraws Russia from SWIFT, it’s possible Gazprom will say they didn’t offer gas since they can’t get compensated for it,” Fulwood added.
EU Plots Its Revenge
“As we prepare for penalties, we are also planning for countersanctions,” a senior EU source stated.
Long-term commitments will be followed, according to Russian President Vladimir Putin. Putin wants to be perceived as following the laws so that his pet project, Nord Stream 2, can be authorized by German and EU authorities later this year.
STONE COLD: State Department vows Nord Stream 2 will remain a ‘hunk of metal at the bottom of the ocean’ if Russian president makes moves on Ukraine. https://t.co/vfBs003DhL pic.twitter.com/JicZLPfBEO
— Fox News (@FoxNews) January 28, 2022
Russia, on the other hand, might cut off Ukraine’s gas transit route while maintaining to serve its customers in northern Europe. Through Gazprom’s TurkStream network, supplies to Turkey, Bulgaria, Serbia, Hungary, as well as Croatia, might remain.
“Russia enforces steady stress on the EU during the cold weather heating cycle by attempting to keep its EU supply to the contractual minimal level,” said Henning Gloystein, electricity director of the Eurasia Team risk capital consulting firm.
“This is the most probable option as long as the Ukraine crisis simmers, but largely remains tactful.”
