ECONOMY

Wed 15 Mar 2023 8:21 pm - Jerusalem Time

Gas battle between Russia and the West

Paris - (AFP) - Natural gas has become a weapon in the war between Russia and the West since Moscow's forces invaded Ukraine on February 24.



Here is a snapshot of how this feud developed:


On February 22, 2022, German Chancellor Olaf Scholz announced the suspension of the Nord Stream 2 pipeline project with Russia in response to Moscow's recognition of two separatist regions in Ukraine.


The project has always raised tensions between Berlin on the one hand, and its allies in Europe and the United States on the other, due to their fear that it will increase Germany's dependence on Russian energy supplies.


Ukraine also fears that it will lose the revenues generated by gas transportation in the event of the operation of the Nord Stream 2 pipeline, which delivers Russian gas to Germany via the Baltic Sea.


On February 24, Russia invaded Ukraine. Oil and gas prices rose as a result of concerns about the possibility of declining supplies.
On March 2nd, the European Union banned seven Russian banks from the SWIFT system for bank transfers.


But it excluded two major lenders closely linked to the energy sector, reflecting the dependence of several EU countries on Russian gas.


On March 8, US President Joe Biden banned Russian oil and gas imports destined for the United States. The European Union said that it will reduce its imports of Russian gas by two-thirds this year, while Britain confirmed that it will gradually stop its imports of Russian energy by the end of 2022.


On March 23, Russian President Vladimir Putin banned European customers of Russian gas from paying their bills in dollars and euros, in response to the freezing of Russia's currency reserves abroad worth about $300 billion.
And he announced that Moscow would no longer accept only payments in rubles from "unfriendly" countries, including those in the European Union.


In turn, the European Commission warned the European Union countries that making payments in rubles would constitute a violation of the international sanctions imposed on Moscow.


Washington agreed to supply Europe with 15 billion cubic meters of LNG this year.


On April 27, the Russian giant "Gazprom" group cut off gas supplies to Bulgaria and Poland, in a move described by European Commission President Ursula von der Leyen as "blackmail".


It reported that the two countries, members of the European Union and NATO, are now getting gas from their neighbors in the European Union.


On May 21, Russia cut off gas to Finland, which refused to pay in rubles and angered Moscow with its request to join NATO.
Russia also cut off supplies to the Netherlands and Denmark in response to their refusal to pay in rubles.
On May 30, EU leaders agreed to halt most Russian oil imports by the end of the year but without imposing a ban on Russian gas.
In mid-June, Gazprom significantly reduced daily gas supplies to Germany via the Nord Stream pipeline, driving up prices.
Gazprom cut supplies several notches, citing a technical problem, in a move that came as European Union leaders prepare to grant Ukraine candidate country status to join the bloc.
On June 23, Germany moved further toward gas rationing, raising its alert level regarding supplies to the second level of a three-point scale.
On July 11, Gazprom began regular 10-day maintenance operations on the Nord Stream 1 pipeline, which led to a reduction in gas supplies to Europe.
A week later, the European Union signed an agreement with Azerbaijan to double gas imports from the Caspian Sea country to Europe.
The bloc, which includes 27 countries, has also resorted to oil-rich countries such as Qatar, Norway and Algeria to compensate for the energy shortage.
And on July 20, the European Commission urged member states to cut demand for natural gas by 15 percent over the coming months to ensure winter stocks.
On July 25, Gazprom announced that it would cut supplies by about 20 percent of the pipeline's capacity starting Wednesday due to a "technical problem" with a turbine.
The German government, in turn, said there was "no technical reason" for the move.

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Gas battle between Russia and the West

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