Russian President Vladimir Putin has announced that the flow of Russian natural gas to European buyers has gone down due to the West's own actions, and that further decreases in supply might continue. This latest statement by President Putin has increased concerns throughout the European Union that a cut off of the gas supply would lead to political and economic havoc across Europe in the coming winter months. As such, the European Union has begun the process of creating emergency plans to reduce their overall gas demands in the coming months, with the hope that greater cuts now will allow for building up reserves for the cold winter months should Russia follow through in cutting off deliveries.
In terms of more immediate impacts, according to comments President Putin made to Russian reporters in Tehran, where he had been present for peace talks over the conflict in Syria with the leaders of Iran and Turkey, the supply of gas being pumped through the Nord Stream pipeline to Germany will be reduced from 60 million cubic meters a day to 30 million cubic meters a day. This roughly represents one-fifth of the Nord Stream pipeline's capacity. President Putin put this further reduction down to a turbine needing to be replaced.
In response to this announcement, Germany has accused Russia of using the turbine as an excuse to further limit gas deliveries.
President Putin has further warned that should the West follow through with plans to cap the prices of Russian oil due to sanctions over the Ukraine War, that the global oil market will grown unstable and prices will soar as a result.
It has already become clear that these disruptions to the gas supply to Europe have been hampering the efforts of states in the European Union to refill their gas stores before this upcoming winter. The lack in adequate reserves will likely lead to rationing and a reduction in economic growth if something is not done in the face of further Russian efforts to restrict the flow in response to sanctions imposed due to the Ukraine War. As such, the European Commission has proposed a voluntary target for all states in the European Union to cut gas use by 15 percent between August and March, as compared to average consumption over the years of 2016 to 2021, in an effort to help stabilize the situation. European Union Commission President Ursula von der Leyen has said in response to the situation that Russia is blackmailing the EU and that, regardless of how much the supply is cut, that the countries of the EU need to be ready.
It should be noted that this use of oil and gas by Russia is nothing new. In fact, Russia under President Putin has consistently utilized oil and gas supplies as an effective foreign policy tool to further Russian interests. Researchers have long known of how Russia has used ‘petro-carrots’ (using oil and gas supplies to reward allies) and ‘petro-sticks’ (cutting off oil and gas supplies to punish states resisting Russia foreign policy preferences) to influence the policies of its neighboring states. Indeed, in the past states like Georgia, Ukraine, and the Baltic states have all seen their gas supplies interrupted by Russia, resulting in higher prices, when they have resisted falling in line with Russian foreign policy preferences and instead moved closer to the West. Conversely, those states which fell into line with Russian desires in the past, like Armenia, Belorussia, and tiny largely unrecognized states like Abkhazia, North Ossetia, and Trans-Dniestria, have received large supplies of oil and gas at subsidized prices for their loyalty to the Kremlin.
One especially noteworthy example, which might be in part what is galvanizing the EU to be proactive now, is how Russia cut off all gas supplies to Europe through Ukraine in 2009, stating that it had been Ukraine’s fault due to how it had shut down the last pipeline carrying gas from Russia. The move impacted many across Europe, and left tens of thousands in Bulgaria without central heating in the cold winter. As a result of this cut off of gas supplies, Bulgaria, Croatia, the Czech Republic, Greece, Italy, Macedonia, Romania, Serbia, Slovakia, Slovenia and Turkey all announced they had no more Russian gas shipments coming in to their countries. Austria, France, Germany, Hungary, and Poland, though still receiving some gas following this shut off, still reported substantial drops in the overall gas supply.
Needless to say, members of the EU wish to get out ahead of a similar situation happening this winter, which has led to calls for a voluntary cut of gas use by 15 percent between August in March, though this has yet to be voted upon by the EU commission. Knowing what we do about how Russia has used gas supplies as a foreign policy weapon in the past, however, it is likely a cut off as a result of President Putin’s orders is coming. It will be in the best interests of the European Union to get out ahead of the situation.