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https://time.com/6172292/russia-ukraine ... on-energy/The Russia-Europe-U.S. fight over Putin’s Nord Stream 2 natural gas pipeline, which Germany forswore only after Putin invaded Ukraine, is another of many examples. The 1,224 km, 55 billion cubic meter (bcm) capacity submarine natural gas pipeline from Ust-Luga, Russia (near the Estonian border) to Greifswald, Germany was never necessary for gas transit purposes. Europe already has 245 bcm pipeline capacity connecting it to Russia, with over 100 bcm unused. Rather, Russia wanted to bypass Ukraine as a gas transit country, and to deepen Germany’s dependency on Russian gas so that Europe would be too paralyzed by energy fears to oppose its invasion of Ukraine.
Thus far, Russia is winning at this game. The war he started may not be going Putin’s way, but his gamble that Europe and much of the developing world would be too insecure about energy to mount a meaningful reaction when he moved into Ukraine has arguably proved true thus far. Despite Germany’s April 28 announcement that it would drop its opposition to imposing an E.U. energy embargo—at least on oil and natural gas—against Russia, there remains a difficult negotiation among member states as to what form such a ban would take, and its timeline. Thus far, it therefore remains true that the E.U. has failed to follow the U.S. (mostly symbolic, because it imports very little fuel from Russia) lead in instituting an energy embargo against Russia.
In 2021, 60% of Russia’s revenues were from energy exports. While, as of April 7, Europe had given Kyiv over €1 billion to support Ukraine’s fight against the Russian invasion, it paid Russia €35 billion for energy imports during that same period. In other words, Europe has been paying for Russia’s attack on its smaller, democratic neighbor with one hand because it is still buying Russian energy exports, while sanctioning other Russian activities with the other. Even while E.U. countries pour weapons and aid into Ukraine, they have not yet forced themselves to defang the Russian bear.
It is not only Europe’s failing, however. The United States, despite its own oil and gas embargo on Russia (which the White House fought to avoid imposing), cannot bring itself to break off Russian uranium imports. It still imports 16% or more of its uranium from a country that over 70% of Americans believe to be an enemy. Meanwhile, India, for example, continues to buy Russian Urals crude oil that most of the world has shunned. Perhaps worst of all, Bloomberg reported that ten European countries have opened bank accounts at Gazprombank through which to comply with Russia’s demand to be paid in rubles, even though such payments may violate existing sanctions on financial transfers.
Russia has enjoyed this leverage because it is an energy and commodity superpower. The largest oil exporter on earth and the runner up on crude exports, it also supplies the European Union with about 40-45% of its natural gas—and as much as 80% of Austria’s, 55% of Germany’s, and 40% of Italy’s, among others. It also boasts 40% of the world’s uranium enrichment capacity, 20% of class 1 nickel, 30% of global palladium, and so on.
On April 26 Russia flexed these energy muscles against Poland and Bulgaria. In a Tweet, it announced that “Gazprom fully halts gas supplies to Bulgaria’s Bulgargaz and Poland’s PGNiG due to their failure to pay in rubles.” Nominally, the justification as claimed is that these E.U. countries refused to acquiesce to Gazprom’s demands that its existing contracts now be paid, in violation of those contracts’ terms, in Russian rubles instead of U.S. dollars. The switch is an effort by Russia to prop up its faltering currency, and economy more broadly.
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