The source of Russia-Lithuania tensions and the risk of a Russia-NATO war

New tensions between Russia and the West have escalated after Lithuania decided to stop transporting certain goods through its territory to Russia's Kaliningrad region as part of European Union (EU) sanctions against Russia.

The Kremlin has warned it will respond to sanctions in a way that could have "extremely negative effects" on the Lithuanian people, raising fears of a direct conflict between Russia and NATO.

Location of Kaliningrad. Photo: CNBC

The Kaliningrad region was once part of the German province of East Prussia but came under Soviet control after World War II under the 1945 Potsdam Treaty between the Allies. Since the Cold War, Kaliningrad has been a major base for the Russian Baltic Fleet.

However, after the collapse of the Soviet Union and the independence of the Baltic states, Kaliningrad was divided from the rest of Russia by Lithuania, Latvia and Estonia – all members of NATO. To the south of the territory is Poland – also a NATO member.

As Russia’s relations with the West have escalated, Kaliningrad’s military role has increased. The region has become a frontline in Russia’s efforts to counter what Moscow sees as hostile NATO policies. The Kremlin has built up its military forces there, equipping them with modern weapons, including Iskander precision-guided missiles and some of the most advanced air defense systems. As the region’s military role has increased, Kaliningrad’s dependence on Poland and Lithuania for goods has made it vulnerable.

The source of Russia-Lithuania tensions

Lithuania has stressed that the ban on sanctioned goods is part of the fourth EU sanctions package against Russia, saying it only applies to steel and ferrous metals from June 17.

Vilnius authorities have rejected Russia's call for a blockade, stressing that goods are not subject to sanctions and that rail passengers can still travel through Lithuania. As part of the EU decision, Lithuania will ban imports of Russian coal from August and shipments of oil and petroleum products through the country will stop in December.

Illustration photo: Reuters

EU foreign policy chief Josep Borrell backed Lithuania, saying he was concerned about the form of Russia's response, but defended Vilnius' stance.

"I am certainly always concerned about Russia's reaction," Mr. Borrell said, while affirming that there is no siege on Kaliningrad.

"Lithuania does not implement unilateral sanctions, but only applies EU sanctions."

Russia has officially protested the suspension of cargo shipments to Kaliningrad, calling the move a violation of the Russia-EU agreement on free movement of goods to the region. Kaliningrad Governor Anton Alikhanov said the ban would affect half of the goods shipped to the region, including cement and other construction materials.

Nikolai Patrushev, Secretary of Russia's Security Council, visited Kaliningrad on June 21 to meet with local officials. He called the restrictions "hostile acts" and warned that Moscow would respond with certain measures "that will have a significant negative impact on the Lithuanian people."

Mr. Patrushev did not elaborate, but Mr. Alikhanov said Russia's response could include stopping cargo shipments through ports in Lithuania and other Baltic states.

Lithuania has significantly reduced its economic and energy dependence on Russia, recently becoming the first EU country to stop using Russian gas. It has also stopped importing Russian oil and has stopped importing electricity from Russia. Most shipments from Russia through Lithuanian ports have stopped under the terms of EU sanctions, but Moscow may restrict the transit of goods from third countries through Lithuania. President Putin will decide on Russia's response after receiving a report from Mr Patrushev.

Timothy Ash, senior strategist at BlueBay Asset Management, commented, "Kaliningrad is strategically important to Russia.", while also assessing that Russia will certainly protect this land.

"Russia will react, that's for sure. The question is what that reaction will be and whether Russia will take military action."

Ash believes Russia would likely use its naval forces in the Baltic Sea to conduct some form of retaliatory blockade of Lithuanian trade, although this would likely be seen by NATO and the EU as a serious escalation of tensions.

"It will be a fine line in deciding whether to invoke Article 5 of the NATO Treaty or not."

The risk of a direct conflict between Russia and NATO

Tensions between Russia and NATO, which were already escalating over the war in Ukraine, have worsened after Lithuania's move, and the situation now threatens to plunge a NATO country and possibly the entire alliance into direct conflict with Russia.

Some Western countries fear Russia may be considering using military action to control a land corridor between Belarus and the Kaliningrad region known as the Suwalki Corridor – a 65km strip of land in Poland along the border with Lithuania.

Illustration photo: Reuters

Observer Vladimir Solovyov has accused on Russian state television that the West's brinkmanship is counting down the days to World War III.

Lithuanian Defense Minister Arvydas Anusauskas warned on June 22 of the danger posed by Russia's actions amid escalating tensions in the Kaliningrad region.

Still, some Western observers say that with Russia's military buildup in Ukraine, using any force in the Baltics would exceed its conventional weapons capabilities.

Estonian Prime Minister Kaja Kallas said Lithuania would not face a military threat, adding that Russia was trying to pressure the EU to end sanctions.

“Russia is very good at playing on our fears so that we back down from making decisions,” Mr. Kallas said in an interview with AP.

Tensions between Russia and Poland and Lithuania could spark a direct conflict between Russia and NATO - the military alliance obliged to defend any member under the principle of collective defense in Article 5 of the NATO Treaty.

On June 21, US State Department spokesman Ned Price emphasized Washington's "rock-solid commitment to this principle", which he called a "pillar" of NATO.

Russian Deputy Foreign Minister Sergei Ryabkov responded by warning the EU and NATO against "dangerous" statements about Kaliningrad.

"Powerful and influential forces in the West are doing everything they can to make tensions with Russia worse," the diplomat said, adding that some actions "have no limits, making the prospect of a military confrontation with us seem inevitable."

Asked whether Russia would only react diplomatically or go further, Russian Foreign Ministry spokeswoman Maria Zakharova said: "The answer is no. It will not be a diplomatic reaction, but practical measures."