Energy

‘Tectonic Shift’: Putin Could Crush European Energy Market By Withholding More Gas, Top Energy Group Says

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Thomas Catenacci Energy & Environment Reporter
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The International Energy Agency warned Tuesday that Russia could cause significant damage to European energy markets by further withholding natural gas supply.

Using natural gas supplies as a political weapon, though, could ultimately backfire on Russian President Vladimir Putin if European utilities choose to purchase supplies elsewhere, IEA Executive Director Fatih Birol said, according to The Guardian. Russia is responsible for approximately 46% of European gas imports, European Union data showed.

Russian state-run energy firm Gazprom has reversed and halted natural gas flowing through a key pipeline that delivers much of Europe’s energy needs in recent weeks. The alteration to regular flows came as geopolitical tensions in Ukraine increased and Russian troops assembled at its neighbor’s borders, a move decried by the West.

“If Russia stops the gas supply to Europe, it could have a seismic impact on European energy,” Birol told the Guardian in an interview. “(Russia) has to consider the consequences if existing oil and gas supplies to Europe are halted.” (RELATED: Russia Cuts Off Key Gas Pipeline To Europe Amid Rising Tensions)

“Failure to maintain (supplies) would shatter Russia’s reputation as a reliable partner and that would be a tectonic shift,” the IEA chief added. “Russia would be seen as a threat and that would have far-reaching consequences for European economies, but even more consequences for Russia. Europe would choose a strategy to diverge from Russia.”

President Joe Biden and German Chancellor Olaf Scholz shake hands at a joint news conference on Monday after meeting to discuss Russian aggression near Ukraine. (Anna Moneymaker/Getty Images)

President Joe Biden and German Chancellor Olaf Scholz shake hands at a joint news conference on Monday after meeting to discuss Russian aggression near Ukraine. (Anna Moneymaker/Getty Images)

Birol added that Europe may soon have major decisions to make on Russian relations if energy prices continue to slam consumers, the Guardian reported. Russian gas supplies have dropped 25% even as demand has increased and prices have skyrocketed.

On Jan. 25, the White House announced it would help facilitate greater non-Russian natural gas flows into Europe. Such imports would come from North Africa, the U.S., Middle East and Asia.

“Energy security is tied directly to national security, regional security, global security,” Secretary of State Antony Blinken said during a news conference after meeting with European leaders Monday. “Europe needs reliable and affordable energy, especially in the winter months.”

“When Russia halted gas supplies to Europe over a dispute with Ukraine in 2009, people died from the cold. And when energy supplies fail, economies falter,” he added.

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