Russia uses gas as a powerful tool to pressure the EU in the Ukraine conflict

Russia's dominance in the gas sector

Russia is using its dominance of the European oil and gas market, where Russian oil and gas products account for 40% of the European Union's (EU) gas consumption, to undermine EU support for Ukraine.

Increasing that pressure ahead of winter, Russia shut down the Nord Stream 1 gas pipeline to Germany from August 31 to September 3, citing maintenance, but in reality possibly to seek concessions from the EU in sanctions against Russia.

A worker checks equipment at a compressor station at the starting point of the Nord Stream 2 gas pipeline, in Russia. Photo: TASS.

Meanwhile, British Finance Minister Nadhim Zahawi is scheduled to meet with US Treasury Secretary Janet Yellen on August 31 to ask the US to boost energy exports to ease the energy crisis in Europe.

As gas prices have risen, Russia has been playing hardball by flaring gas instead of selling it to the EU via European pipelines. For example, a Russian gas plant near the Finnish border has burned an estimated $10 million worth of natural gas every day since August 27.

This amount of natural gas burned is equivalent to 0.5% of the EU's daily gas demand. This may not sound like much, but in the context of a severe gas shortage in the world in general and in Europe in particular, stopping the supply to the EU even in such a small amount would exacerbate the crisis.

Russia had previously reduced the amount of gas flowing through Nord Stream 1 to 20% of its capacity by June 2022. Russian state energy company Gazprom explained that this was due to faulty or missing equipment.

Russia’s dominance of gas supplies to the EU is its biggest economic weapon. There are fears that Russia will turn off the gas tap altogether. On August 30, Russian gas giant Gazprom cited a contractual issue when it cut off gas supplies to France. The same happened to Poland and Bulgaria in April 2022. And recently, Gazprom announced it would turn off Nord Stream 1 indefinitely.

EU struggles to cope

Russia has also demanded that all payments be made in rubles, using this as justification for cutting off gas supplies. Meanwhile, EU countries and the UK are scrambling to find alternative sources of energy for the coming winter, and move away from dependence on Russia.

European countries are desperate to fill their reserves to cope with the coming winter.

Germany appears to have filled 80% of its oil and gas reserves, but it is unclear whether other European countries have done the same.

Many European countries are scrambling to find other solutions. Bulgaria has said it will renegotiate a gas deal with Russia, while Hungary has already started talks with Russia.

Liz Truss, the candidate for the leadership of the British Conservative Party, said that if she becomes British Prime Minister, the country will drill for more oil in the North Sea.

If the coming winter is really cold, old divisions within the EU could return, and the competition between EU countries over energy supplies could fracture the EU and its alliances.

Russia's economy has long been based on the extraction and export of natural resources. According to the World Bank, natural resources accounted for 46% of Russia's GDP in 2020. Oil and gas accounted for nearly half of that figure, while metals, chemicals, and food products made up the rest. According to data provided by Statista, oil and gas accounted for 21.7% of Russia's GDP in the first three months of 2022 - the highest share of oil and gas in Russia's GDP since 2017.

However, the impact of Western sanctions on Russia will take longer than some hope. The idea that the Russian economy will collapse in a matter of weeks is unrealistic.

Russia has tried soft measures.

Russian gas pipeline system leading to Europe. Photo: Alamy.

After the Orange Revolution in Ukraine in 2014, the pro-Russian government collapsed. Russia then turned to other techniques to pressure countries like Ukraine to pull them to its side.

Through the promotion of culture, ideals and values ​​(commonly known as soft power), a country can persuade others to follow its path. Russia has attempted these soft power tactics in the post-Soviet region with varying degrees of success.

But in the end, to make other countries see Russia as a great power, promoting culture was not enough. Russia had to resort to hard power.

Russia's tough tactics

Ultimately, Russia has relied on either military force, as in Georgia in 2008, or economic pressure. At various times, Russia has used economic weapons, such as banning Moldovan wine or Georgian Borjomi mineral water, both in 2013, to sway these countries to a pro-Russian line.

However, it is gas that has always been Russia’s main economic weapon against the EU and its neighbors, with the gas wars of 2006 and 2009 being prime examples.

In 2006, when Ukraine failed to pay its gas bill, Russia cut off the pressure on the gas pipelines to Ukraine and reduced supplies. This had a negative impact on the EU economies at the time and showed the fragility of relying on Russia. In 2009, the same scenario was repeated.

Russia has systematically used gas as a weapon, reducing natural gas shipments to Europe, thereby forcing European politicians to behave more “reasonably” toward it. Logistical obstacles have made it difficult for the EU to wean itself off its dependence on Russia for oil and gas. And Russia continues to exert influence in this way.

The Russian government believes it can reduce Western support for Ukraine by limiting gas supplies and creating a recession in the EU economy.

The Kremlin is hoping that the coming cold winter and rising energy bills will deter European voters from supporting Ukraine as they increasingly focus on their own domestic and economic problems. In fact, pro-Russian voices have emerged within the EU, convincing EU voters that the war in Ukraine is not worth their support./.