Politics

What Are The Chances Of Russia Cutting Off Gas Supplies To Europe?

Vladimir Putin and several Russian officials have threatened to cut off gas supplies to Ukraine “by the end of the week”, sparking fears of a possible cut-off across the entire Europe. So should the West be worried about Russia’s threats or not?

Russia has cut off gas supplies to Ukraine three times in the past decade (2006, 2009 and last year after Kremlin accused Kyiv of not paying up). Basically, Vladimir Putin has used energy as a geopolitical ‘weapon’ once again, this time as a tactic to destabilize Ukraine.

What Are The Chances Of Russia Cutting Off Gas Supplies To Europe?

The current dispute comes as Kremlin accuses Kyiv of falling behind scheduled payments for gas and threatens to cut off its supplies as soon as this weekend, risking flow of gas to Europe. Ukraine’s state-owned energy company Naftogaz described Russian statements as “blackmail” and reported that Moscow had only supplied around 40% of contracted gas since February 22.

Furthermore, Vladimir Putin has recently said that Ukraine’s unwillingness to supply gas to the rebel-held areas in eastern Ukraine “smells of genocide”.

Kyiv says it will not pay for gas delivered to the areas which the Ukrainian government has no control of. And so Kremlin, which backs the pro-Russian rebels with its forces and supplies, responded by directly supplying the rebels with gas contracted to Ukraine. In return, Ukraine has accused Russia of using this as a way to support separatists and then try and get the Kyiv government to pay for it.

Since gas can be easily siphoned off the pipeline while being transported via Ukraine, Russia is unable to stop Ukraine from receiving gas without cutting off the whole flow to Europe.

Therefore, in this scenario Russia wants to frame Kyiv as the unreliable supplier of gas, rather than Kremlin.

How much gas is pumped through Ukraine to Europe and what happens if Putin cuts the gas to Europe?

Russia currently exports about 150 billion cubic meters per annum to Europe, which is roughly around a third of the continent’s gas needs, and roughly 50 percent of that gas is transported via Ukraine. Europe is supplied with Russian gas by three pipelines: one through Ukraine, one through Belarus and Poland, and the third one, Nord Stream, goes straight under the Baltic Sea from northern Russia to northern Germany.

Moreover, according to Eurostat, Russia is not only the biggest Europe’s gas supplier with the third of the continent’s gas needs, but also the biggest crude oil (with 30% of it) and solid fuels (with 26% of it) supplier.

Even if Russia really did cut off supplies to Europe, it would have uneven effects across the region, since some of the Eastern European countries are far more dependent than Western European countries.

The gas situation is particularly serious in Finland, Bulgaria, Slovakia, Estonia, Latvia and Lithuania which the European commission estimates 100% dependent on Russian gas. Not only these countries are most dependent on Russian gas, but they are also the least fuel-efficient. In contrast, Denmark, France, the Netherlands, Romania and the UK source around 20% or even less of their supplies from Gazprom. For example, UK buys only a tiny amount of gas directly from Gazprom, but the supplies it takes from other European countries are mostly supplied from Russia.

Previous disagreements between Russia and Ukraine over gas had led to plans for a South Stream via Bulgaria, but it was then aborted due to EU objections. Kremlin now wants to build a pipeline via Turkey instead.

In general, if the cut-off indeed happens for more than a few days, it would be pretty problematic for the people in south-eastern Europe who still to a great extent depend on Russian gas.

How likely is that scenario?

The question is pretty simple: is the rhetoric coming from the Kremlin just an empty talk, or does it really carry some weight?

It seems unlikely however that Russia will in fact stop the gas transit via Ukraine. Some experts claim that Russia is far more dependent on Europe than vice-versa. Building a pipeline to Germany under the Baltic Sea serves as a proof of that claim, and means that it is imperative for Russia to always keep gas supplies to Europe relatively uninterrupted.

Kremlin’s threats might also be interpreted as a response to the February 25th European Energy Strategy which advocates alternative energy sources to gas.

A spokesperson for the European Commission Anna-Kaisa Itkonen said Brussels was not concerned that the disagreement between Russia and Ukraine would hurt gas supplies to Europe. At the end of the day, last year’s dispute between Moscow and Kyiv did not have any effect on gas transit through Ukraine to Europe. “At the moment, gas flows to the EU are normal and we expect that the gas transit to the EU will not be affected,” she told reporters.