Expert: Russia can put pressure on oil, gas prices for several weeks

Indrek Kannik
Indrek Kannik Source: Ken Mürk/ERR

Russia has the ability to put pressure on Europe and West by cutting gas supplies for several weeks but not for much longer, said Indrek Kannik head of the International Center for Defense Studies on Monday.

At the Mallnow metering point on the German-Polish border, gas flows fell significantly over the weekend. While Gazprom sent 12 million kWh of energy to Europe on Thursday and 10 million kWh on Friday, exports fell to 1.2 million units on Saturday.

The sharp decline in gas supplies through the Yamal gas pipeline raises the question of whether the Kremlin is using gas to put pressure on the EU which threatened Russia with new sanctions last week.

Indrek Kannik, head of the International Center for Defense Studies, said Russia has acted this way several times in recent months to Moldova, Belarus and Ukraine. Russia is using energy supplies as a political lever.

"Russia has used it repeatedly and, as a rule, it is during the winter, where the risks and inconveniences are greatest," Kannik told ETV's current affairs show "Aktuaalne kaamera" on Monday.

Cutting imports would certainly cause problems but the West would not be vulnerable for long, Kannik said.

"The West can replace it, maybe the price will be a little more expensive, but it is not a disaster. If Russia loses its oil and gas revenues from the West, it will be a complete disaster for the Russian national economy, the Russian budget cannot live without it," he said.

"But for a week or two they can still play with it. The West needs to endure that time and learn for the future," said Kannik.

Although things may look bad, Henrik Hololei, head of the European Commission's Directorate-General for Transport, said Russia has been a relatively secure gas supplier to Europe.

"The situation on the other side of the Ukrainian border raises a well-founded question in this regard. Whether there may be market manipulation, I do not dare to speculate at the moment. There may be other reasons," Hololei told AK.

Minister of Foreign Affairs Eva-Maria Liimets (Center) said this move seems to be part of a larger confrontation between Moscow and the West.

"Looking at the current developments, we can really say that it looks like part of the big picture. And as such, it is definitely of concern to us," Liimets said in the broadcast.

Head of research at the International Center for Defense Studies Tomas Jermalavicius said Russia's aims were clearly geopolitical but there are also economic aspects.

Speaking to ERR earlier on Monday, he said: "Russia is seeking to force the German authorities to approve the Nord Stream 2 pipeline, increase the political cost of supporting Ukraine, sow disagreements between EU countries and influence European market conditions so as to favor long-term agreements with Gazprom that will ensure its continued dominance in Europe."

However, in the long run, Moscow is shooting its foot in it, the researcher said.

"Because even those in Europe who have advocated maintaining economic and energy relations with Russia understand the importance of finding alternatives in energy supply to Russia," he said.

In recent months, gas prices have risen to a record high in Europe.


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Editor: Helen Wright

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