Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 30 April 2022 Author: Grzegorz Kuczyński
Russia Cuts Off Gas To Poland, Bulgaria
Russia’s Gazprom cut Poland and Bulgaria off from its gas for refusing to pay in roubles, which was a purely political move. Moscow somehow had to respond to the fact that European clients had rejected Vladimir Putin’s demand that foreign purchasers of Russian gas pay in the Russian currency. It was the Kremlin’s tit-for-tat move after the West imposed a batch of sanctions that crippled the Russian currency. It was a brazen demand as Putin’s demand to pay in roubles was a breach of contract. Once it is met, EU recipients would violate the sanctions against Russia. Putin thus incites some discrepancies within the EU while seeking to display the bloc’s weakness at the time of Moscow’s invasion of Ukraine.
Initially, all EU customers ignored Putin’s demand. After a few weeks, Russia decided to play hardball. By cutting off natural gas flows to Poland and Bulgaria, the Kremlin showed it was not joking. Of course, Russia will not cut off gas supplies to Germany or Italy amid these two’s reluctance to pay in roubles. Such actions will strengthen the arguments of some Western politicians and businessmen who are ready to accept Putin’s demand to keep gas flows unchanged. This group that involves Germany’s Uniper and Italy’s Eni must have been encouraged by the Hungarian foreign minister who said his country would meet Putin’s demand that Russian gas be paid in roubles. Their argument is reliance on Russian hydrocarbons. Those in Germany, Austria, and some other countries could play the same argument. Not only is the EU unable to tighten energy sanctions against Russia, but it also cannot enforce the restrictions already in force. The European Commission has said countries should not pay in roubles, and that complying with Russia’s request could breach EU sanctions. Hungary has broken ranks with the European Union, saying it will accept Moscow’s demand that gas supplies be paid for in rubles. For many countries––including Germany––it is vital for Russia not to cut off gas supplies. Their governments and businesses are looking for some legal ways to circumvent EU sanctions and be allowed to pay for gas in roubles. It is doubtful that Poland makes efficient efforts to impose new sanctions on Russia––including an embargo on energy commodities––amid the Kremlin’s decision to cut off gas flows. Importantly, the gas crisis displayed solidarity between some countries of Europe. Regardless of vast gas reserves, increased LNG imports, and plans to launch the Baltic Pipe pipeline in October, Lithuania offered some help to Poland, with a new gas link between the two countries to be opened on May 1. Lithuania boasts a flowing LNG terminal in Klaipeda. Norway said it would increase output to satisfy the needs of Poland. Bulgaria could count on Greece––the country’s prime minister Kiril Petkov discussed the issue with his Greek counterpart.
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