Home LATEST NEWS What if Russia cut off the gas to Europe?

What if Russia cut off the gas to Europe?

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Answers from Catherine Locatelli, researcher at the National Center for Scientific Research, attached to the University of Grenoble, specialist in the Russian oil and gas industries, and Jack Sharples, researcher in the gas program at the‘Oxford Institute for Energy Studiesin Great Britain.

1. Could Russia suspend gas supplies to Europeans?

It is unlikely, says Jack Sharples. The Europeans have long-term contracts with the Russian company Gazprom for the supply of gas. The taxes brought in by this export represent between 5% and 6% of the federal budget of the Russian State, which therefore has a good economic reason not to interrupt European supplies.

There are four major supply routes:

  • the gas pipelines that cross Ukraine;
  • the Yamal-Europe, which passes through Belarus;
  • the Blue Stream and the Turk Stream which pass through Turkey;
  • Nord Stream 1 and 2, which are direct supply routes between Russia and Germany. Nord Stream 2 has recently been completed and is awaiting clearance from German regulators to begin operation.

In the event of an interruption, Gazprom, a private company controlled by the state, would suffer considerable damage. In addition to losing significant revenues, the gas giant would face possible lawsuits from its injured customers. In addition, its reputation would be tarnished and its partners could hesitate, henceforth, to sign contracts with it. The damage to Gazprom would be worse than that to the Russian government itselfbelieves Mr. Sharples.

Europe is its only real export market. Russia is trying to sell its gas to Asia, but the exchanges are negligible compared to exports to Europe.

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2. What would happen in the event of an armed conflict?

Europeans import around 85% of the gas they consume and Russia is their main supplier. If there was a real war in which the West would participate, the markets would react to the uncertainty and the prices of gas would increase, underlines Jack Sharples.

Any interruption, any reduction in this flow, even partial, would have a very strong impact on the balance between supply and demand on the European market, and would cause prices to jump. »

A quote from Jack Sharples, researcher at the Oxford Institute for Energy Studies

The situation is already tense and the price of gas is at its highest, explains Mr. Sharples. So there is little room for manoeuvre.

However, even when there were problems with Crimea in 2014, the gas supply by Ukraine was always maintained, recalls Ms Locatelli who believes that, in the event of a war, Russia will try to pass the gas through other routes.

A man clears snow in front of gas infrastructure.

Yamal-Europe transfer station, Belarus

Photo: Getty Images / VIKTOR DRACHEV

In the event of a conflict, the Europeans could consider diversifying their sources of supply, but for Russia it would be much more complicated to turn to other export markets.

There is a real interdependence between the European Union and Russia. »

A quote from Catherine Locatelli, CNRS researcher, attached to the University of Grenoble

A major conflict could cause damage to infrastructure, which would have the effect of hindering or interrupting gas flows. On the other hand, an intervention limited to the Donbass region, in the east of Ukraine, would have little impact since the gas pipelines do not pass through this region, specifies theOxford Institute for Energy Studies in its latest quarterly report.

3. TheEuropean Union shouldn’t it try to decrease its dependence on Russian gas?

Europe has been trying to diversify its supply for several years. But in a gas market open to competition, Russia has enormous comparative advantages, emphasizes Catherine Locatelli.

Russian gas production is the second in the world after the United States. Its geographical proximity to the European Union means that the cost of Russian gas is low compared to other sources of supply, such as liquefied natural gas (LNG), which is much more expensive.

If we only let competition play, it is Russia that is taking market share. »

A quote from Catherine Locatelli, CNRS researcher, attached to the University of Grenoble

In addition, Russia has always been a reliable supplier, contrary to what one might imagineexplains Ms. Locatelli. It has always contractually fulfilled its contracts and has never voluntarily interrupted its supply contracts with the European Union.

There aren’t really any other sources availablesummarizes Mr. Sharples. The volume of gas we consume is so large that it is very difficult to diversify.

For the moment, he explains, despite their desire to have increased use of green technologies, for example hydrogen, European states are not yet ready to do without fossil fuels, such as gas.

If we want to reduce our dependence on Russian gas, the only way to do that is to reduce our dependence on gas in general. »

A quote from Jack Sharples, researcher at the Oxford Institute for Energy Studies
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