Russia cuts gas to Europe through the Nord Stream indefinitely | International

The energy war waged by Russia and the EU over the conflict in Ukraine reached a critical point this Friday. The Kremlin’s gas monopoly, Gazprom, announced the indefinite closure of the Nord Stream gas pipeline after assuring that it has detected oil leaks in the only currently active compressor unit, and its repair “is only possible by a specialized repair company.” That is, in the facilities that Siemens has in Canada, a country that included Gazprom on its list of sanctions. The supply had been interrupted —in principle due to maintenance work— since Wednesday and was due to resume this Saturday morning. The announcement, a few hours before the deadline, adds uncertainty to the future of this pumping, necessary for European supply, and angered Brussels, which accused Moscow of resorting to “false pretexts” to cut off the supply.

Gazprom’s announcement came a few hours after the G-7 and the European Commission agreed to impose a maximum price on Russian oil and the president of the Community Executive, Ursula von der Leyen, advocated extending the measure to gas imports.

The closure until further notice of Nord Stream aggravates the trend of constantly reducing the flow of Russian gas to the EU. According to the latest data compiled by the Bruegel think tank, from August 22 to 28 Moscow supplied a total of 856 million cubic meters of gas to the community bloc, a third of what was pumped in the same week in 2021 and far from its maximum. historical (3,811 million).

Until the recent aggravation of tensions with the European Union, the Nord Stream gas pipeline, which runs from Russia to Germany under the Baltic Sea, was one of the main routes of entry of gas into the EU from Russia. Its pipelines managed to transport 40% of all the gas that Moscow exported to the EU, although since July it had only been working at 20% of its capacity. After its closure, the supply only reaches the Union through two routes: the tube that crosses Ukraine (it sends 278 million cubic meters compared to 736 a year ago) and the one that crosses Turkey (316 million, a hundred more than in 2021) . The Yamal gas pipeline, which passes through Poland, has been closed since May.

“The supply will be completely suspended until they are eliminated (problems) highlighted in the operation of the equipment,” Gazprom warned in a statement. The company attached a photograph showing “one of the identified leaks”, an oil spill next to some cables.

The European Commission is suspicious of the technical arguments used by Russia. “Gazprom’s announcement that it will once again shut down Nord Stream under bogus pretexts is yet another confirmation of its unreliability as a supplier,” Commission spokesman Eric Mamer said on Twitter. The Community Executive, in addition, affirmed that what happened is “proof of Russia’s cynicism, since it prefers to burn gas instead of fulfilling contracts.”

Other community sources interpret that Moscow’s decision is the response to the EU’s plans to restrict visas for Russian citizens and that, seeing how European gas reserves have risen, it has decided to give a new twist.

The President of the European Council, Charles Michel, has assured that “the use of gas as a weapon will not change the determination of the EU”, which will accelerate the path towards energy independence. “Our obligation is to protect our citizens and support the freedom of Ukraine”, he stated in a message on Twitter.

Germany, one of the countries most affected by this interruption, welcomed the news assuring that it is better prepared for gas cuts than in the past. This was stated by a spokesman for the German Ministry of Economy. “We had already seen in recent weeks that Russia was not to be trusted, so we have taken steps to strengthen our independence from energy imports from Russia,” the spokesman said in a statement. And he added: “We are much better prepared than we were a few months ago. These are hard times. Greater efforts will be required, but we are on the right track to deal with the situation.”

In principle, the EU has a good level of gas reserves to face the winter. The latest data from the Gas Infrastructure Europe group indicate that the objective of filling at least 80% of the gas stores for winter has already been met.

Oil price cap

Meanwhile, the new turn of the screw in the sanctions against Russia for the invasion of Ukraine has begun to take shape. The pact reached by the G-7 countries to impose a cap on the price of oil is an important step “to reduce Russia’s income and ability to finance the war.” Hence, they have promised to work so that this cap is ready “urgently”. In addition, Brussels wants to extend this measure to gas.

“We invite other States to introduce the limit that is designed and implement this important measure,” says the final statement of the meeting held in Germany. This call is significant, because among the members of the G-7 there are countries that gave up buying oil from Moscow months ago (the United States, Canada and the United Kingdom) and others that will do so in a few months (France, Germany or Italy, as well as the vast majority of European Union countries). If successful, this measure may be more damaging than others, since oil is Russia’s main source of foreign currency: in 2021 the Member States and the United Kingdom bought crude worth 88,000 million euros.

With this Friday’s agreement, the cadence that has been followed other times that important economic sanctions have been imposed on Russia for invading Ukraine is repeated. First, a pact is reached within the G-7, a forum in which the United States has great weight, and later they are developed and approved by the European Union and other countries that join in these punishments. This happened, for example, with the seizure of financial assets and the disconnection of the SWIFT code of Russian banks, which took place a few days after Moscow opened fire on kyiv.

“The initial price limit will be set at a level based on a series of technical data and the full coalition will decide the initial limit before its application in each jurisdiction. The price cap will be publicly communicated in a clear and transparent manner,” the statement explains, adding: “The effectiveness and impact of the price cap will be closely monitored where necessary.”

Commitment

“By committing to finalizing and implementing a price cap, the G7 will significantly reduce Russia’s main source of funding for its illegal war, while maintaining supplies to world energy markets by keeping Russian oil flowing at lower prices. ”, stated the US Secretary of the Treasury, Janet L. Yellen.

Also the European Commissioner for the Economy, Paolo Gentiloni, present at the meeting, underlined the double objective of the allies to stop the war. “The G-7 needs to work on establishing a broad global coalition to design the price limit and implement it jointly to maximize its effectiveness,” added the Italian, aware that the Achilles’ heel that makes sanctions less effective, both those that are applied in the future like those that are already being applied, is that there are countries that do not join, which leaves holes for Russia to bypass them.

The fact that the European Commission supports this measure does not mean that it will be easy to apply it throughout the EU because it requires unanimity and that means negotiating again with the Hungarian government of Viktor Orbán, a great ally of Moscow among the Twenty-seven.

At the end of May, the EU agreed to abandon imports of Russian crude that arrive by sea before the end of the year and temporarily maintain those that arrive by pipeline so that Germany and Poland cushion the impact, although they promised to cut these purchases at the end of 2022. Only Hungary, Slovakia and the Czech Republic would maintain these imports.

Follow all the international information in Facebook Y Twitteror in our weekly newsletter.