The European Union countries are divided on how quickly they should reduce their reliance on the Russian energy supply. Despite the imposition of sanctions in other areas of commerce, the EU continues to rely substantially on Russian oil and gas.
Germany’s economic minister stated that the country will be ready to withstand a Russian oil embargo by the end of 2022, implying that he supports stronger sanctions.
Hungary, on the other hand, has stated that it opposes such a move, stressing that it will not support moves that could jeopardize supplies. Under increasing pressure to limit the funding stream backing President Vladimir Putin’s conflict in Ukraine, EU ministers met on Monday to debate how to handle the issue.
Members states face two major challenges: how to pay for Russian energy without violating or undermining EU sanctions, and how to seek and develop alternative supplies to move away from reliance on Russia.
Religion on Russian Energy in The European Union
The EU’s energy policy leader, Kadri Simson, told a press conference on Monday that Russia’s decision to cut off gas supplies to Poland and Bulgaria had bolstered the bloc’s resolve to become independent of Russian fossil fuels.
The EU, on the other hand, has imported around £37 billion worth of fossil fuels since the conflict began, according to the Centre for Research on Energy and Clean Air (CREA).
Germany and Italy were the world’s two largest importers. Last week, Russian energy giant Gazprom halted gas exports to Poland and Bulgaria after those nations failed to comply with Russian requests to switch to rouble payment, and many other EU member countries are expected to face the same problem by mid-May.
Poland and Bulgaria had intended to cease using Russian gas this year and believe they will be able to adapt, but the move has sparked fears that other EU members, especially Germany, Europe’s gas-dependent economic powerhouse, could follow suit.
Ms. Simson reiterated on Monday the European Commission’s position that paying for gas in roubles would be a “violation” of sanctions and “cannot be accepted.” She stated that before the winter, member states were stockpiling gas storage supplies.
The EU’s desire to “pivot away” from Russian oil and gas was “quite evident,” according to Nathan Piper, head of oil and gas research at Investec, but the lack of unity was due to the “capacity to actually make that happen,” he added.
Robert Habeck, Germany’s economic minister, said his country had “managed to achieve a scenario where Germany can withstand an oil embargo” and was “on track to do the same for gas.” “Other countries will take a little longer,” he continued. According to diplomatic sources, compromises to a complete bloc ban are being considered, particularly for countries like Hungary and Slovakia.
It’s Easier to Find New Oil Suppliers Than It Is to Find New Gas Suppliers
Compared to gas, which is most typically transported through pipelines, Mr. Piper said there were more opportunities for alternative supply with oil. Finding new supplies is also “trickier” for landlocked EU countries, he noted. While Germany may move to ban oil, he warned that shutting down its Russian gas supplies, which account for 40% of the country’s overall imports, would take “years.”
“If you want to go after our oil, how about we cut back on our gas,” he added. Germany should reduce gas use now to prepare for the potential of a future cut-off from Russia, according to the energy research institute EWI.
Uniper, one of Germany’s largest energy companies, has warned that a The European Union ban on Russian oil could force Russia to cease gas exports to the West.