Executive summary:“This is an open gas war.” On the evening of July 25, local time, Ukrainian President Volodymyr Zelensky said in a speech. On the same day, Gazprom announced for the third time that it would reduce the gas supply of the “Nord Stream-1” pipeline.
“This is an open gas war.” On the evening of July 25, local time, Ukrainian President Volodymyr Zelensky said in a speech. On the same day, Gazprom announced for the third time that it would reduce the gas supply of the “Nord Stream-1” pipeline.
At the same time, the European Union, which is struggling with energy issues, also accused Russia of “using energy as a weapon”. Russian Foreign Minister Lavrov said that in the past six or seven years, the EU has been saying that Russia has used natural gas “as a weapon”, but has not given any examples, and has also used various methods to limit the transportation capacity of the “Nord Stream-1”.
Has the “energy war” between Russia and Europe really sounded the horn?
EU sparring to reach ‘gas-saving’ deal
Currently, many countries in Europe are very dependent on Russian natural gas. According to 2021 figures, about 45% of the EU’s natural gas comes from Russia.
Specifically, 55% of Germany’s natural gas demand depends on Russia, about 40% of Italy’s natural gas comes from Russia, and countries such as Austria and the Czech Republic rely on Russian natural gas for more than 80%.
Russia’s reduction in gas supply has made Europe, already mired in an energy crisis, worse.
After the news that the supply of the “North Stream-1” pipeline will be reduced again on July 27, the European natural gas futures price once reached 190.49 euros per MWh, hitting a new high since March 9. The long-term high energy prices have boosted inflation, brought huge real income losses to countries, and exacerbated the problems of people’s livelihood.
On the other hand, in order to solve urgent problems such as energy consumption, inflation and the cost of living crisis, many countries ignored their carbon reduction commitments and chose to restart coal, which was previously considered to be “more polluting”.
In addition, in order to safeguard energy supply in winter, the Council of the European Union approved a rule requiring member states to fill gas storage facilities to 80% by this winter. But that goal has become increasingly elusive as supplies of Russian pipeline gas dwindle.
To achieve this goal, the EU has proposed an emergency rule requiring countries to cut their natural gas use by 15% from August this year to March next year. Although the cut is voluntary, the European Commission has the power to enforce it in an emergency. implement.
However, due to the different realities faced by each country, the regulation was opposed by half of the EU member states: some countries considered the 15% target too high because of their low dependence on Russian gas supplies; others did not Willing to grant the European Commission the power to “voluntarily change” the “gas-saving” indicator into mandatory. Representatives of various countries were stuck in a stalemate in the negotiation, and the plan aimed at “saving gas” made the countries “angry” instead.
In the end, in the quarrel, the EU reached a “shrinked version of the gas saving agreement” with a series of exemptions on the 26th local time, including EU countries that are not connected to the natural gas network of other member states, and some industries “are not subject to mandatory cuts. Constraints on natural gas consumption”, etc.
Public opinion believes that in the context of lack of gas, differences within Europe may become more prominent, and this winter may become a “historic test of European unity”.
Has the “energy war” begun?
After the outbreak of the Russia-Ukraine conflict, Europe and Russia have frequently moved around the energy issue. The EU has introduced a series of sanctions against Russia, and Russia has chosen the issue of natural gas supply, which is crucial to Europe, and introduced countermeasures, causing the two sides to fight against each other.
Since mid-June this year, due to various reasons such as Western sanctions and component maintenance, the daily gas transmission volume of the “Beixi-1” natural gas pipeline has been reduced twice, from the initial 167 million cubic meters to 100 million cubic meters, and then again down to 67 million cubic meters.
On July 21, Gazprom announced the annual overhaul of the “Beixi-1” pipeline, during which the delivery of natural gas to Europe was suspended, which once caused panic in Europe, worried that Russia would stop supplying due to this. However, the pipeline finally resumed operation on July 21, and the gas transmission volume also returned to the level before the maintenance (67 million cubic meters per day).
Just four days after the gas supply resumed, the news that Gazprom plans to cut the supply of “Beixi-1” for the third time has once again affected Europe’s nerves.
In view of this, European politicians have repeatedly said that Russia may cut off gas supplies this winter.
However, the Russian side expressed completely opposite views. Russian Presidential Press Secretary Dmitry Peskov said that Russia has “no interest” in cutting off gas supplies to Europe. He stressed that Russia “is a responsible gas supplier” and reiterated that the reduction in “Nord Stream” supply was caused by sanctions.
A senior analyst at BCS Global Markets Analysis believes that it is possible for Russia to completely shut down this key gas pipeline to Europe, but it is very unlikely, because if there is even a very small flow of gas, Russia will be more likely to “negotiate more Favorable Turbine Maintenance Conditions”.
A senior researcher at the European Bruegel Institute analyzed that it is better to fluctuate the already low flow than to cut off the supply completely, because “this can manipulate the market and optimize the geopolitical impact”.
In Hungary, which is highly dependent on Russian natural gas, Prime Minister Orban once told the media that Europe’s sanctions policy is on a “self-destructive” track. He said Europe was now “already shooting itself in the lungs and we’re seeing European countries ‘gasping’.”
Original title: The gas supply has been stopped repeatedly, and the energy war between Russia and Europe has started?