Though the European Union (EU) Commission has recommended a mechanism to cut gas consumption and encourage stockpiling for the upcoming winter season, most of the EU states are going alone with gas deals.
With the Russian decision to further cut gas supply to Europe, experts fear that shortages of fuel in upcoming winter could reinvigorate populists and anti-EU sentiment across the bloc.
The price of natural gas has shot through the roof since the start of the conflict in Ukraine, hitting consumers and prompting most European governments to introduce cost of living subsidies.
Amid the prospect of an energy shortage forcing Europe to ration its supply this winter, the EU Commission presented a plan on July 20 to cut gas use across the EU by 15 percent until next spring. The target would be voluntary, but the new regulation also gives the EU the power to declare an emergency and make it mandatory.
Russia’s state-owned Gazprom told Germany’s biggest importer of Russian gas, RWE, it will not be able to fulfill contract obligations due to “force majeure”. Gazprom had already reduced gas provision to Germany through the Nord Stream 1 pipeline by 60 percent last month. The Nord Stream 1 pipeline was reopened on Thursday after scheduled maintenance, but is expected to reduce supply of gas.
“Russia plays a strategic game. Keeping low flows is better than cut-off. It decreases our resolve to reduce gas demand. We must not fall into the trap and go [into] crisis mode anyhow,” said Simone Tagliapietra, senior fellow at the Brussels-based think tank Bruegel.
Russia has denied attempting to exert pressure on the EU by using gas as leverage over its sanctions on Ukraine. However, the European Energy Agency (EEA) reports that due to the increase in gas prices following Russia’s attack on Ukraine, its revenue from European gas alone has increased by two times the average over the past several years, reaching $95 billion. Analysts fear the additional revenue could make it easier for Russia to shut the supply entirely to put pressure on the bloc.
“If Russia decides to completely cut off gas supplies before Europe can get its storage levels up to 90 percent, the situation will be even more grave and challenging,” EEA head Fatih Birol wrote this week.
