Moscow today threatened natural gas deliveries to any European country that contrives a bypass to supply Ukraine with Russian fuel. The warning is a salvo against what it called a “half-fraudulent scheme” to confound Moscow’s 11-day-old cutoff of gas to Ukraine.
The outburst came the same day that Ukraine finally signed an “Association Agreement” that moves it officially closer to the European Union, an act that Moscow regards as a red line. Russian president Vladimir Putin’s popularity has soared on the back of his government’s aggressive actions to annex and destabilize the eastern parts of Ukraine, and to punish the rest of the country.
At the heart of Moscow’s leverage in the region is Ukraine’s and Europe’s reliance on Russian natural gas supplies, as the chart below shows. At the same time, Russia ships half of that gas through Ukraine, which consequently exerts its own pressure on Russia.
In remarks to reporters, Alexei Miller, the CEO of Gazprom, spoke out against European contemplation of a maneuver called “reverse-flow supply”—taking Russian gas exported to Europe and re-delivering it to Ukraine. If successful, the stratagem would reduce Moscow’s ability to pressure Ukraine to pay a disputed $4.5-billion gas debt. “A reverse flow is a semi-fraudulent mechanism whereby gas runs in circles,” Miller said. “This is Russian gas.”
Ukraine already receives gas this way from Germany, which delivers it via Poland. And Slovakia has agreed to reverse-flow a small volume to Ukraine as well, starting in October. On June 25, Gunther Oettinger, the European Union’s energy commissioner, explored the idea of significantly enlarging the plan to effectively take care of all of Ukraine’s gas imports.
With the weather warm, gas is less of a pressing issue, so the brinksmanship is likely to continue until winter. Russia is betting that by that time (paywall) Europe will buckle.