Will the EU withstand Russia's gas blackmail: key questions about Putin's "energy front"
Russia seeks to force the West to reduce support for Ukraine, writes "European Truth". The portal cites the opinion of Slovak expert Karol Hirman, who believes that the Kremlin plans to achieve this due to Europe's weak positions in the energy sector.
Yuri Panchenko
It's no secret to anyone: next winter will be very difficult for both Ukraine and the EU. Russia is reducing gas supplies to prevent EU countries from preparing sufficient reserves for the winter. The Kremlin hopes that this will make the EU more compliant to their demands. How realistic is Putin's calculation? Will the EU make global concessions to Russia?
We wanted to get an answer to these questions from a European expert who knows both the gas sector and the mood in Europe well. That is why we asked these questions to the Slovak energy expert Karol Hirman, who advised both Slovak and Ukrainian governments.
Putin's Energy Strategy
Putin's strategy was already outlined when he came to the Kremlin – even then he openly declared that energy exports were an important part of the geopolitical strategy of the Russian Federation. It is enough to recall 2006 and 2009 – two gas crises that affected both Ukraine and Europe.
We have been seeing a decline in gas supplies to Europe since last summer, when on Catholic Christmas we saw that one of the key Yamal–Europe gas pipelines had stopped and that Gazprom had not filled its gas storage facilities in Germany, Holland and Austria. This was already preparation for a special operation in Ukraine, but no one in Europe understood this yet. After February 24, we see how Putin regularly reduces gas supplies through Gazprom in order to put pressure on Europe and create chaos.
But we should not forget about the third gas pipeline, the Turkish Stream, which runs along the bottom of the Black Sea through Turkey to the Balkan countries and Hungary. This gas pipeline works without problems, because it is part of Putin's game with the European market, and through this gas pipeline the allies of the Russian Federation or "Trojan horses" in NATO and the EU are supplied: Recep Erdogan in Turkey and Viktor Orban in Hungary.
By the way, Hungarian Foreign Minister Peter Szijjarto recently visited Moscow, where he agreed on additional gas supplies. Most likely, Orban will trade this gas with other countries, earning decent money for his position, which he has inside the EU and inside NATO, and in relation to Ukraine.
How will the energy embargo affect Russia?
So far, the Russian Federation has managed to avoid serious losses – although supplies are sharply declining, prices are also sharply rising at the same time. And on the basis of this, Gazprom is still able to compensate for its losses in terms of volumes. However, this situation is not eternal, and problems will sooner or later "catch up" with Gazprom.
When the European embargo gains force, it will have a significant impact on the Russian Federation. But you need to understand and keep in mind that Putin is not an economist and not a politician. He is a KGB man, and in this his thinking differs even from the logic of Soviet leaders. They were careful not to blackmail Europe with gas. Putin wants to achieve his goal, and he doesn't really care about losses.
The mechanism of marginal oil prices
"Collusion of buyers", which is much talked about, is quite a working idea. It can affect oil prices and thereby seriously hit the Russian economy. However, in order for this mechanism to work, it is necessary that the main non–Western clients of the Russian Federation - China and India - join it. Whether this is real, we don't know yet.
The position of Saudi Arabia, the Arab Emirates and the Persian Gulf countries will also be important, since Russian oil creates competition for them in traditional markets in Asia.
Another important point is what condition the world economy will be in. We see that it has problems not only in the West, a sharp decline is also observed in China. All this is automatically displayed on the demand for oil and on its prices.
Is the EU ready to impose an embargo on oil and petroleum products from the Russian Federation
Everything is going to the fact that the embargo will come into force. Of course, there will be an exception for the Druzhba oil pipeline. There is a very subtle detail here that is important for Ukraine to understand. Exports of petroleum products from oil that will be supplied through Druzhba will flow to Ukraine and support your country, including the army, on the move. It may not sound very pleasant, but there is simply no other way out.
Possible launch of Nord Stream –2
I would not say that the goal of the Russian Federation is now to launch Nord Stream 2. The Russian gas blackmail has other reasons: Putin wants to get the EU to reduce support for Ukraine, primarily in the supply of weapons.
On the other hand, recently Russian officials have begun to make statements that the launch of Nord Stream 2 is a way out of the current crisis and will allow increasing Russian gas supplies to the EU. Most likely, this will lead to increased pressure from German big business on its government to meet the Russian Federation with the Nord Stream–2.
But here the question arises. If Nord Stream –1 does not work, and the explanations that this is due to problems with turbines are fairy tales, and their manufacturer Siemens is already directly stating this, then on what basis do we conclude that the launch of Nord Stream – 2 will solve this problem? Where is the guarantee that if Nord Stream –2 is launched, then in a couple of days or weeks it will also not fail?
Will Europe freeze?
The EU's plan to save gas by 15% looks like a realistic goal. Moreover, in many regions this goal was achieved even without an action plan from the European Commission. The current increase in gas prices in itself motivates to save gas. Without any European regulations or orders. And this process will still gain momentum.
Another thing is that this is not able to compensate for the complete shutdown of gas supplies from the Russian Federation. This stop is already a reality. And we need to be prepared for the fact that this and next winter in Europe will be very difficult. Of course, Europe will not freeze. The existing reserves are already sufficient to provide gas supplies for households, hospitals and critical infrastructure.
But we should expect regulation of supplies for certain groups of consumers, first of all, large industrial consumers. At least – in some winter periods.
Anyway, the question of how much gas from Russia will flow to Europe depends on how successful the Russian army will be or not successful in Ukraine. This is a factor that affects, in principle, everything. Including the EU energy sphere, as well as the Russian economy and the stability of the Putin regime.
