The moment when Moscow decided to cut gas to Bulgaria and Poland was revealing. It came just as the European Union was nearing a breakthrough in sanctioning Russian oil imports.

Just a few hours earlier, the governments of Poland and Germany had jointly announced an agreement to cooperate on oil supplies that would supplant Russian imports.

Vice Chancellor Robert Habeck said Germany was “very, very close” to getting rid of Russian oil altogether, a change from just a week earlier when his government ruled that this was impossible.

The plan is to dismantle Europe’s tangle of pipelines to connect an alternative supply to Germany’s last refinery importing Russian crude: Schwedt’s PCK refinery, which supplies Berlin and the east of the country.

Instead of receiving oil directly from the Russian heartland through the Druzhba pipeline, PCK would get supplies through the Polish port of Gdansk and the German Baltic port of Rostock, connected by another pipeline.

One problem: The PCK refinery is owned by Russia’s state-owned energy company Rosneft. They “don’t even answer the phone” to requests to make the change, Habeck said Wednesday.

The addition of Germany would be a major advance for the EU’s efforts to ban imports of Russian oil, which are worth even more than gas.

Therefore, the solution is for Rosneft to “stop being the operator of the refinery,” Habeck said. How? German media have reported that Berlin is prepared, when necessary, to nationalize such infrastructure.

The addition of Germany would be a major advance for the EU’s efforts to embargo Russian oil imports, which are worth even more than gas.

It seems that Moscow did not like this prospect and reacted by punishing Warsaw and warning Berlin, while taking the initiative and unleashing new volatility in energy markets to stoke fears about the cost of living. She reminds Germany of Russia’s influence: that she can damage Germany’s industrial sector at will by cutting off the gas.

It is also an attempt to force EU countries to pay for gasoline in rubles, forcing them to undermine their own sanctions and support the Russian currency. Gazprom’s justification for the move was that Bulgaria and Poland did not meet this demand.

Is there division in the ranks?

ruble accounts

A source close to Gazprom told Bloomberg that four European buyers had already paid in rubles and 10 had opened ruble accounts in preparation, fueling feverish speculation about which countries were willing to comply. Prominent Polish politician Donald Tusk tweeted rumors that Austria, Germany and Hungary were among the culprits.

This was denied by Austrian Chancellor Karl Nehammer, who suggested that this was “Russian propaganda fake news”, deliberately reported to sow division. “Austria adheres to the jointly agreed EU sanctions to the last semicolon,” he wrote.

This demonstration that Russian energy cannot be trusted is reaffirming previously vague aspirations to reduce dependency.

The division is a strategy of the Kremlin for many years. Moscow has repeatedly cut off or threatened smaller countries’ gas supplies while leaving others untouched in recent decades, a way of demonstrating the costs of defiance and the rewards of compliance.

This time the tactic may backfire. Repeatedly during this war, Moscow’s tough tactics have served to unify Western countries and achieve the opposite response from what was intended, such as the dark threats of “consequences” that have led Finland and Sweden to join NATO.

This demonstration that Russian energy cannot be trusted is reaffirming previously vague aspirations to reduce dependency.

bidirectional costs

In the case of Poland, the move has accelerated an existing plan by the Warsaw government to halt Russian gas imports this year. Poland has already opened a liquefied natural gas terminal as part of efforts to reduce dependency, and a new gas pipeline to Norway is scheduled to open this fall. The government has said that its existing stocks are sufficient to last until then.

Bulgaria is more vulnerable as it relies on Russia for 90 percent of its gas, a dependency locked down through years of dubious energy infrastructure deals.

But his new coalition government had already announced plans to end Russian gas imports next year, helped by a gas connection with Greece that will receive supplies from Azerbaijan after July.

Remember: the costs imposed by this sudden switch to decades of mutually beneficial energy deals are not one-way.

Moscow has been rapidly developing new gas pipelines to China. But the capacity is limited.

The Russian regime is financially backed by oil and gas revenues. While there are interested customers elsewhere, adjusting energy supply infrastructure is as complex for Russia as it is for the EU.

For example, Moscow has been rapidly developing new gas pipelines to China. But the capacity is limited. Russian gas exports to China in 2021 were 16.5 billion cubic meters. That’s 10 percent of exports to the EU that year or, in simple terms, less than two Poland.



Reference-www.irishtimes.com

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