Western Nations Mull Effects of Sanctions: Is Disruption of Natural Gas Supplies Next Domino?

Moscow imposed a total ban on imports of many Western foods on Thursday last week in retaliation against sanctions over Ukraine, a stronger than expected measure that isolates Russian consumers from world trade to a degree unseen since Soviet days. (Reuters/Scanpix)
8/12/2014 1:09 PM
Category: International

The ramifications of Russia's blanket one-year ban on EU, US, Australian, Canadian and Norwegian meat, seafood, dairy products and produce - in reaction to Western sanctions on Russia for its meddling in Ukraine - is still being analyzed, both locally in Estonia and on world markets.

In Estonia, Agriculture Minister Ivari Padar and Foreign Trade Minister Anne Sulling met with food processing industry representatives in an emergency meeting today - the dairy industry has been especially concerned - and are giving a press conference now. We'll have that story soon.

France's farm lobby asked Friday for an immediate removal from the market of all EU fruits and vegetables that can no longer be exported to Russia. A similar action was urged with regard to milk, milk products, meat and fish, fearing that excess supply will crater food prices, CNBC reported.

The European media are filled with talk about the effects of sanctions. Dutch News.nl, for example, reported today that sanctions could cost Dutch farmers 1.5 billion euros, triple the original estimate. The web site said that the Dutch media are reporting that around 300 trucks carrying fresh produce are stuck at the Russian border, and prices are dropping fast at trade auctions.

BBC News wonders if China could fill the vacuum, replacing the trillion dollar gap in trade with its own products. Belarus might, in fact, also be a winner as a supplier.

However, decisions being mulled in Ukraine might be the most fateful in the short run, as the Kyiv government is considering whether to slap sanctions on Russia and its oil and gas company Gazprom, a measure that may lead to disruption of natural gas supplies in Europe.

Ukraine Prime Minister Arseny Yatsenyuk said last week that parliament would begin to debate sanctions today, which could include bans on Russian gas and sanctions on Russian banks, the Kyiv Post wrote, noting that those sanctions could have severe repercussions for EU members.

Ukraine gas grid Naftogaz said Monday, according to the Moscow Times, that the sanctions could limit or even exclude some companies from piping gas through the country, which would give other companies a chance to take over transit operations, although the statement did not specifically mention Gazprom or Russia.

European companies currently buy gas from Russia on the border between the EU and Ukraine. Russia supplies about one-third of European gas needs, and the transportation route for roughly half of it is through Ukraine.

Other than through Ukraine, Russian gas to Europe is shipped through Belarus and via the Nord Stream Baltic Sea pipeline, which skirts between Estonia and Finland on its route to Germany. Norway's Statoil has already stated it could boost supplies in Europe but cannot fully substitute for Russian gas, Reuters reported.

Estonian Prime Minister Taavi Rõivas said on Friday that it was too early to say what the final impact of Russian sanctions will be on the nation's economy, but of the larger category of goods that Estonia ships abroad, 24 percent of Estonian dairy exports go to Russia, 5.5 percent of the meat products and close to 9 percent of vegetables.


The name field cannot be empty
No more than 50 characters
Comment field cannot be empty
No more than 50 characters
Comment field cannot be empty
No more than 1024 characters
{{error}}

Message forwarded to the editor

This Ip-address has limited access

See also

There are no comments yet. Be the first!

Reply to comment

+{{childComment.ReplyToName}}:
Reply to comment
Reply

Laadi juurde ({{take2}})
The name field cannot be empty
No more than 50 characters
Comment field cannot be empty
No more than 1024 characters
{{error}}
Add new comment