Natural gas has emerged as a weapon of war between Russia and Europe since Moscow’s February 24 invasion of Ukraine. In a latest development, Russia has suspended gas supplies to Latvia following tensions between Moscow and the West over the conflict in Ukraine and sweeping European and US sanctions against Russia. The declaration came a day after Moscow and Kyiv accused each other of bombing a jail holding Ukrainian prisoners of war in Russian-held territory.
Gazprom drastically cut gas deliveries to Europe via the Nord Stream pipeline on Wednesday to about 20 percent of its capacity. The Russian state-run company had earlier announced it would choke supply to 33 million cubic metres a day half the amount it has been delivering since service resumed last week after 10 days of maintenance work.
EU states have accused Russia of squeezing supplies in retaliation for Western sanctions over Moscow’s intervention in Ukraine. Gazprom cited the halted operation of one of the last two operating turbines for the pipeline due to the technical condition of the engine. Kremlin has blamed EU sanctions for the limited supply.
The stand-off developed started on February 22 German Chancellor Olaf Scholz says he is suspending the Nord Stream 2 pipeline project with Russia in response to Moscow’s recognition of two breakaway regions in Ukraine. The project has long been a source of tension with Berlin’s allies in the United States and Europe, who worry it would increase Germany’s energy dependence on Russia. Ukraine also fears it will lose revenues from gas transit if Nord Stream 2, which would deliver Russian gas to Germany via the Baltic Sea, goes ahead.
On February 24, Russia invades Ukraine. Gas and oil prices soar on fears of possible cuts in supplies. On March 2, the European Union cuts seven Russian banks off from the SWIFT banking transfer system. But it spares two major lenders with strong ties to the energy sector, reflecting the dependence of several EU states on Russian gas. On March 8, President Joe Biden bans US imports of Russian gas and oil. The EU says it will cut its imports of Russian gas by two-thirds this year and Britain says it will phase out its Russian energy imports by the end of 2022.
On March 23, Russian President Vladimir Putin bans European gas customers from paying their bills in dollars and euros, in response to the freezing of some $300 billion in currency reserves held by Russia overseas. He announces that Moscow will now only accept payment in rubles from “unfriendly” countries, including EU nations. The European Commission warns EU members that by paying in rubles they would be violating international sanctions against Moscow.
Washington agrees to provide Europe with an extra 15 billion cubic metres of liquefied natural gas this year. On April 27, Russian giant Gazprom cuts off gas supplies to Bulgaria and Poland, in a move European Commission chief Ursula von der Leyen describes as blackmail. She says the two EU and NATO members are now receiving gas from their EU neighbours. On May 21, Russia cuts gas to neighbouring Finland, which has refused to pay in rubles and angered Moscow by asking to join NATO. The Netherlands and Denmark are also cut off after refusing to pay in rubles.
