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Russia puts pressure on Europe by cutting its natural gas supply

Russia has cut the flow of natural gas to Europe in a move European leaders have called a clear attempt to hit back at Western countries for their support for Ukraine.

On Friday, Russia halved its natural gas supplies to Italy and Slovakia and cut off France entirely, marking a third consecutive day of gas cuts in a growing economic confrontation between Moscow and the West. Moscow previously cut off all natural gas flows to Poland, Bulgaria, Finland, the Netherlands and Denmark.

After Russia invaded Ukraine, the European Union joined the United States in imposing sweeping financial sanctions on Russia. But European governments have braced for economic retaliation from the Kremlin and officials have described this week’s natural gas supply cut as an effort by Moscow to exert political pressure and drive up gas prices. ‘energy.

The Russian cuts pushed up already high natural gas prices and led the German government to call on citizens to save energy. Short-term gas prices remained high on Friday, up about 50% from Monday at 126 euros ($132) a megawatt for one-month gas futures.

“Every kilowatt-hour helps in this situation. It is a situation that is serious, but not a situation that endangers the security of supply in Germany,” German Vice Chancellor Robert Habeck said in a video released on Wednesday. Germany gets about 35% of its natural gas from Russia.

Habeck said Russian President Vladimir Putin “is doing what was feared from the start: he is reducing the volume of gas, not all at once but step by step.”

Russian energy giant Gazprom announced cuts to natural gas flows to Germany and Italy this week. In Germany, the company blamed reduced maintenance repairs on the Nord Stream 1 pipeline under the Baltic Sea, saying necessary equipment had been held up in Canada due to Western sanctions.

But Italian Prime Minister Mario Draghi dismissed the explanation, saying it was a political decision.

“We and Germany and others maintain that it is a lie, there is a political use of gas,” Draghi told a press conference during a visit with German and French leaders to Kyiv.

Ukrainian President Volodymyr Zelenskyy called the budget cuts “blackmail (against) both individual countries and Europe as a whole”.

Gazprom did not immediately respond to a request for comment.

Europe has sought to reduce its dependence on Russian oil and gas, announcing plans to cut 90% of its Russian oil imports and two-thirds of its Russian gas imports by the end of the year. The Biden administration has promised to help Europe get more natural gas from US exporters.

European governments buy gas on the spot market and try to secure alternative sources, including importing liquefied natural gas from the United States and elsewhere. But Europe still has limited infrastructure to receive LNG shipments and a fire at a major US export depot in Freeport, Texas has reduced US gas export capacity and put highlight Europe’s vulnerable position, experts said.

“Europe must not become complacent and urgently step up coordination so that the continent is ready for a possibly difficult winter ahead,” said Simone Tagliapietra, senior researcher at Bruegel, a think tank in Belgium.

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Post expires at 2:36am on Wednesday June 29th, 2022