Why is this important: Gas prices fluctuate with every word from Putin (they fell on Thursday after he signaled supply would increase next month), and the supply crunch has been an uncomfortable reminder of Europe’s dependence with respect to Russian fuel. At least one country, Moldova, risks a very cold winter if Russia turns off the tap.
Driving the news: Putin recently rejected accusations that Moscow is exploiting the crisis as “utter nonsense, politically motivated rambling and gossip.”
- The Kremlin noted that high prices are actually a risk for Russia as countries could switch to other fuels like coal.
- But Putin is no stranger to the use of gas for geopolitical purposes, notes Anna Mikulska of the Baker Institute at Rice University, in particular to increase the dependence of neighboring countries on Russia or to punish them. countries moving towards the West.
Putin’s envoy at the EU, Vladimir Chizhov, hinted earlier this month that geopolitics was indeed a factor. “Change opponent into partner and things will work out more easily,” Chizhov said, referring to how the bloc is treating Russia.
- Putin has pushed EU countries to agree to longer-term contracts that will keep them dependent on Russian gas but, he says, will guarantee a constant supply.
- And he claimed that one way to ease the supply crisis would be for Germany and the EU to speed up approval of the controversial Nord Stream 2 pipeline, which bypasses Ukraine (Russian gas giant Gazprom has already shipped less gas through Ukrainian pipelines).
- The other side: Amos Hochstein, the United States’ special envoy for energy security, rejected the suggestion, telling reporters on Monday that if Russia has the capacity to increase supply, it can do so using existing pipelines.
Between the lines: It is not clear that Russia can actually increase its supply enough to “decrease the pain significantly,” Mikulska said. “But Russia has at least tried to exploit these conditions to push its own goals. “
- When asked if Russia is using energy as a weapon, Hochstein said: “I think we are getting closer to that line, if Russia does indeed have the gas to supply and chooses not to supply it. do, and it will only do so if Europe accedes to other completely unrelated demands. “
- He added: “The only supplier that can really make a big difference to European energy security this winter is Russia.
The big picture: Russian gas remains an important part of the energy mix in many European countries.
- In Germany, for example, two-thirds of natural gas imports came from Russia in 2018, and Russian gas accounted for 16% of all energy consumption.
- In several Eastern European countries, 100% of natural gas supplies come from Russia.
No country feels the pinch more acutely than Moldova.
- The former Soviet republic has a new government that seeks to turn away from Moscow and turn west – but so far it has been entirely dependent on Russian gas.
- Moldova’s contract expired at the end of September, when Gazprom raised the price and reduced the offer when Moldova refused to pay it.
- The government declared a state of emergency, said it would only negotiate a new contract if Gazprom lowered its price and frantically searched for other suppliers, including striking a relatively small-scale deal with a Polish company this week.
Zoom out: The energy crisis has a mix of causes that have little to do with Russia.
- Supply tightened due to a cold winter followed by a hot summer.
- Gas production in the EU has been in decline for a long time, and renewables have been affected in part by light winds.
- Asian demand has absorbed much of the global supply of liquefied natural gas, limiting potential suppliers for EU countries.
The bottom line: Europe will continue to depend more on Russia for gas than any other source, said Mikulska of the Baker Institute, for reasons of capacity, proximity and existing infrastructure.
- But rather than entering into long-term contracts with Russia, several EU countries like Poland have sought to diversify their supply or sign shorter-term deals, Mikulska says.
- She says Putin risks overplaying his hand and undermining any claim that Russia is a reliable partner.