As the possibility of war and of a full-blown Russian invasion in Ukraine looms high -especially after yesterday’s recognition of Ukraine’s breakaway republics by Russia- fears are growing that Russian gas supplies to several European countries are under threat. These fears are not unjustified given that 22% of the 168,5 Bcm that Russia delivered to the wider European market last year went through pipelines crossing Ukraine. As the possibility of war and of a full-blown Russian invasion in Ukraine looms high -especially after yesterday’s recognition of Ukraine’s breakaway republics by Russia- fears are growing that Russian gas supplies to several European countries are under threat. These fears are not unjustified given that 22% of the 168,5 Bcm that Russia delivered to the wider European market last year went through pipelines crossing Ukraine. So, in the event of military action from Russia’s side even if there are no energy related financial sanctions against Moscow the flow of gas through Ukraine or Belarus may be impaired.
Quite indicative of the growing concerns over the energy supply situation are German fears that Russia could retaliate against western sanctions in the event of war with Ukraine by cutting off gas supplies. According to Germany’s finance minister Christian Lindner such a move could cripple Europe’s largest economy. In a latest interview Christian Lindner told the Financial Times that Russia had always been a reliable supplier of natural gas to Germany, even at the height of the cold war. But that could change if Russia invaded Ukraine and the west punished Moscow with a sweeping sanctions package. “If you look at the cold war, whatever happened between NATO and the Warsaw Pact, there was never a situation where political tensions harmed co-operation in the energy sector,” Lindner said. “Things might be different now.”
The US president reiterated last week that Russia could be poised to invade Ukraine within several days, after massing an estimated 190,000 troops on the Ukrainian border, including those participating in the Belarus drills. The west has warned Russian president Vladimir Putin of grave economic consequences if he attacks his western neighbour. Germany has made clear these would include a halt to the Nord Stream 2 pipeline licensing process -since announced.
In order to understand and explain the current Russian – Ukraine conflict, IENE has prepared a special issue of its occasional “News Analysis” which was sent to IENE members on February 22. Wishing to contribute to the ongoing wider discussion on the current crisis and its implications to European gas supply, IENE has uploaded the above Analysis on its web site which is now freely accessible here.
