World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


Putin is Losing Eastern European Energy Gamble

Putin is Losing Eastern European Energy Gamble

Russian President Vladimir Putin said he doesn't think the European community can do without the natural gas it gets from energy monopoly Gazprom. With a Russian economy starting to decline, however, it may be Gazprom that's too strongly interconnected to the European market to break free.

The narrative over European energy security reaches at least back to 2006 when Gazprom first cut gas supplies through Ukraine. The fallout from the latest disruption in 2009 put opposition darling and former Prime Minister Yulia Tymoshenko in prison, but now the tables have turned for a Ukraine tilting more strongly toward the European Union.

Last week, Putin warned European leaders that gas supplies through Ukraine may be cut if Kiev didn't settle its $2.2 billion gas debt to Gazprom. With European allies mulling the best way to break Russia's grip on the region's energy sector, Putin said there are few alternatives to Russian natural gas.

"Can they stop buying Russian gas?" he asked in a question-and-answer session this week. "In my opinion it is impossible."

Russia sends about 15 percent of its natural gas supplies bound for the European community through the Soviet-era transit network in Ukraine. The European energy market has options in Caspian gas waiting in the wings, and potentially liquefied natural gas deliveries, though those alternatives provide little short-term relief.

U.S. State Department spokeswoman Marie Harf warned Putin against using energy as a geopolitical tool in a crisis that's re-opened old Cold War wounds.

"We've said very clearly that Russia should not use this as a weapon and that, actually, Russia has a lot to lose if they try to do so," she said.

Before the situation erupted into one of the most severe Eastern European crises since the 1990s, the Kremlin had expected 2.5 percent growth in gross domestic product. Now, Economic Development Minister Alexei Ulyukayev said GDP growth should be "near zero" and the Ukrainian row may be to blame.

Trade in oil and natural gas nets Russia about 70 percent of the estimated $515 billion in exportrevenue and accounts for more than half its federal budget. Though Gazprom has sought entry to a growing Asian economy, most of its natural gas heads to the European market, meaning Putin's Russia may be as strongly linked to the EU as the EU is linked to the Kremlin.

Russian First Deputy Prime Minister Igor Shuvalov said the economic situation in the country in part depends on how the Ukrainian crisis plays out. The World Bank, he said, expects 1 percent economic growth for Russia this year. The view from the Kremlin, however, is much more pessimistic. With both Russia and the European community interconnected by natural gas, the relationship may remain intact despite the rhetoric from both sides of the lowering Iron Curtain.

Source: http://oilprice.com/Geopolitics/Europe/Putin-is-Losing-Eastern-European-Energy-Gamble.html

By. Daniel J. Graeber of Oilprice.com

ENDS

© Scoop Media

 
 
 
 
 
World Headlines

 

UN Health Agency Responds To Ebola Spike

UN health agency responds to Ebola spike by deploying team on border of Guinea and Guinea-Bissau More>>

UN Casts Israel As World's Worst Violator Of Health Rights

Israel's army team of medics recently treated 1,600 victims of the Nepal earthquake. More>>

W Thousands Flee Syria’s Besieged Historic City Of Palmyra

As thousands flee Syria’s besieged historic city of Palmyra, UN refugee agency readies response plan More>>

UN Agency To Halt Housing Allowance For Palestine Refugees

Lack of funds forces UNRWA to suspend cash assistance for housing for Palestinian refugees from Syria in Lebanon. Photo: UNRWA/Shafiq Fahed More>>


Bangkok: International Day Against Homophobia, Transphobia, Biphophia

BMA, UN, embassy representatives, civil society and artists stand united with LGBTI Thais on International Day against Transphobia, Homophobia, and Biphobia (IDAHOT) at Bangkok Art and Culture Centre More>>

Displaced Iraqis Face Difficulties As Fighting Continues

UNHCR is concerned about the processing arrangements in place at the Bzabz bridge – a series of pontoons across the Euphrates River which marks the boundary between Anbar province and the capital, Baghdad. Photo: UNHCR/G. Ohara More>>

UNESCO Chief Condemns Killing Of Bangladeshi Blogger

Director-General of the UN Educational, Scientific and Cultural Organization (UNESCO), Irina Bokova. UN Photo/Devra Berkowitz The head of the United Nations agency with a mandate to defend freedom of expression and press freedom worldwide today voiced ... More>>

Philadelphia: Train Crash

Five people have been confirmed dead and more than 136 people injured after an Amtrak train crashed in Philadelphia today at 9.20pm local time.More>>

UN News: Alarming Surge In Bay Of Bengal Crossings

The number of irregular migrants crossing the Bay of Bengal has almost doubled over the past year amid a dangerous uptick in human smuggling and trafficking across the region, according to a new report from the United Nations refugee agency. More>>

Get More From Scoop

 
 
 
 
 
World
Search Scoop  
 
 
Powered by Vodafone
NZ independent news