Brussels fears a large-scale Moscow gas cut after the end of supplies to Poland and Bulgaria for their refusal to pay in rubles
European energy policy is experiencing a crucial moment. Since the beginning of the invasion of Ukraine, Russia has ceased to be a trusted ally of the European Union and, after cutting off gas supplies to Poland and Bulgaria, the community bloc fears a large-scale embargo that could affect several states members and even the entire continent. In this climate of uncertainty and insecurity, the Ministers of Energy of the Twenty-seven met this Monday in an extraordinary meeting in which they discussed the repercussions of the energy cut on the two Member States and decided on the next steps to be taken, among which is the embargo on Russian oil.
The veto on crude oil imports from Moscow has been on the negotiating table for weeks in which European partners decide on the next set of sanctions against the country. While the European Commission finalizes its proposal, countries such as Poland or Ireland have requested a “total and immediate” embargo on Russian oil, a measure that would deal a severe blow to the Kremlin, since the European bill amounts to 48,000 million euros per year, according to the European Statistical Office (Eurostat).
The battery of sanctions will also have the support of Germany, a key player in tipping the European balance, which has already announced that it has managed to reduce its energy dependence sufficiently. The measure, which would be adopted gradually and would have a transition period, however collides with the total refusal of Hungary. Its president, the ultra-nationalist Viktor Orbán, has already shown himself willing to pay for gas in rubles, skipping European sanctions.
“Unity and Solidarity”
Given this scenario, the EU again appealed for unity on Monday and assured that, for the time being, there are no risks of supply disruption between private consumers and the industry sector. “Moscow is not a reliable supplier and we must respond with unity and solidarity, preparing our contingency plans and increasing our strategic reserves,” said Energy Commissioner Kadri Simson.
In parallel, the Community Executive is preparing more detailed guidelines for companies that must pay their payments to Gazprom at the end of May. What is clear is that “paying in rubles is against sanctions,” Simson said.
Since the beginning of the attack on Ukraine, the community bloc has been working to increase its energy independence and seek alternative suppliers of oil and gas. In this way, the EU aims to reduce its energy dependency on Moscow by two thirds. However, the Commissioner for Energy stressed that “completely replacing the supply of Russian gas and oil is impossible. We have to diversify and bet on renewables and energy efficiency.”
The European strategy contemplates the short and long term. In the most immediate period, the Member States are working to increase their strategic gas reserves to reach 80% storage in October, with the start of the winter campaign.
To do this, the bloc wants to rely on the joint purchasing platform, which seeks to aggregate demand and guarantee security of supply. The US commitment to manage 15,000 million liters of liquefied natural gas –LNG– per year is also an important leg of the European plan. As confirmed by Kadri Simson, the supply of this energy is increasing and has already reached the record level of 400 million liters per day.
When asked if the EU is prepared for a gas and oil cut by Russia, the commissioner took a profile and valued the work of the bloc to reduce its energy dependence. A path that the community partners must accelerate now, due to what could happen.
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