Moscow has stoked fears of an energy war by threatening to close a major gas pipeline to Germany after the US pushed its European allies to consider banning Russian oil imports over its invasion of Ukraine.
In an address on Russian state television, Russian deputy prime minister Alexander Novak said: “A rejection of Russian oil would lead to catastrophic consequences for the global market”, and claimed the price of oil could rise to more than US$300 a barrel.
Novak cited Germany’s decision last month to halt the certification of Nord Stream 2, a secondary pipeline, saying: “We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
I have claimed it would be impossible to quickly find a replacement for Russian oil on the European market. “It will take years, and it will still be much more expensive for European consumers. Ultimately, they will be hurt the worst by this outcome,” he said.
Analysts at Bank of America have said prices could reach US$200 a barrel if most of Russia’s exports were cut off, and oil prices hit near 14-year highs on Tuesday, with Brent crude futures reaching as high as $125.19 a barrel.
Novak’s threat refers to the Nord Stream 1 gas pipeline to Germany and follows comments by the European Commission’s climate policy chief that the EU could wean itself off Russian gas within years and start curbing its reliance within months.
“It’s not easy, but it’s feasible,” Frans Timmermans told the European parliament’s environment committee on Monday. Russia supplies about 40% of Europe’s gas.
Russia’s invasion of Ukraine has triggered energy security concerns and the European Commission will on Tuesday propose plans to diversify Europe’s fossil fuel supplies away from Russia and move faster to renewable energy.
Joe Biden held a video conference call with the leaders of France, Germany and Britain on Monday as he pushed for their support to ban Russian oil imports. The US was however willing to move ahead without its European allies, two people familiar with the matter told Reuters.
The US secretary of state, Antony Blinken, revealed the idea was gaining traction in the White House and had been the subject of “very active discussion”. Boris Johnson attracted criticism after saying the UK may have to increase its domestic gas and oil production.
In other developments:
Ukrainian intelligence claimed that a Russian general has died in fighting around Kharkiv, the second such officer killed in a week. It broadcast what it said was a conversation between Russian FSB officers discussing the death of Maj Gen Vitaly Gerasimov, and complaining that their secure communications no longer functioned inside Ukraine.
Ukraine’s president, Volodymyr Zelenskiy, rallied the nation in a fresh late-night video address, saying that “heroic” resistance was making the war “like a nightmare” for Russia. Taking viewers on a tour of his quarters in Kyiv, he promised to stay in the capital until the war was won.
The humanitarian crisis continued to deepen, with 1.7 million Ukrainians thought to have fled the fighting, with the potential for the total to reach 5 million, the EU said. The UN human rights office has reported 406 confirmed civilian deaths but said the number was a vast undercount.
Zelenskiy is to address UK MPs on Tuesday via video link and is expected to plead for more arms and a no-fly zone over Ukraine to be enforced by Nato.
Dmytro Kuleba, Ukraine’s foreign minister, claimed the prospects of the country joining the EU had greatly increased, according to Ukraine’s Union website. The distance to EU membership had been as far away as the moon last week, but was now only from Kyiv to the city of Vinnitsa – a distance of just 262km or 162 miles, he said.
Fresh talks between Ukraine and Russia are expected, after a third round ended without agreement on the evacuation of civilians via humanitarian corridors, although a Ukrainian negotiator said small progress had been made. The French president, Emmanuel Macron, accused Vladimir Putin of “moral and political cynicism” and hypocrisy for making promises to protect civilians so they could flee only to Russia.
A draft of the European Commission’s energy plan, seen by Reuters, suggests increasing gas and liquefied natural gas (LNG) imports from other countries, and phasing in alternative gases such as hydrogen and biomethane.
Other elements would aim to build wind and solar projects faster, and ensure countries fill gas storage before winter to cushion supply shocks. Europe’s gas storage needs to be 80-90% full ahead of next winter, Timmermans said. Storage levels were about 75% as of the end of September last year.
The International Energy Agency has said Europe could reduce Russian gas imports by more than half within a year, but that would require a raft of rapid measures, from swapping gas boilers for heat pumps, to significantly raising LNG imports.
EU leaders may agree at a summit this week to phase out the bloc’s dependency on imports of Russian fossil fuels, without a fixed date, according to a draft statement seen by Reuters. Countries are divided, however, about whether to impose immediate sanctions on energy supplies against Russia. Germany, the biggest buyer of Russian crude oil, has rejected the idea.
George is Digismak’s reported cum editor with 13 years of experience in Journalism