If Russian gas exports stop, "Moscow has more to lose than Europe"

Could the war in Ukraine cause a premature halt to Russian gas exports to Europe?

While the countries of the European Union (EU) had decided to exclude gas contracts from their sanctions against Russia, Vladimir Putin announced on Thursday March 31 that "unfriendly" countries would henceforth have to pay their bills in rubles.

A request deemed unacceptable by the EU, the world's largest buyer of Russian gas, which called on Russia to honor its contracts, which provide for payment in euros and sometimes in dollars. 

Faced with threats from Moscow, which now claims to be considering turning to the Asian market, the French and German governments said on Thursday they were preparing for a possible stoppage of Russian gas imports.

To analyze the potential consequences of such a decision for the EU as well as for Russia, France 24 spoke with Francis Perrin, research director at the Institute for International and Strategic Relations (Iris), specialist in energy issues. . 

France 24: How do you analyze Vladimir Putin's announcement?

European leaders claim to have received pledges that they could continue to buy gas in euros, is the threat from Russia credible? 

Francis Perrin:

This threat is not really credible.

For two reasons.

First of all, it is in contradiction with the content of the contracts which bind Gazprom and the European gas companies, which provide for payment in euros and sometimes in dollars.

Modifying such contracts unilaterally is illegal, and Vladimir Putin knows it.

The other reason is that there are several stories from Moscow: Vladimir Putin announcing the obligation;

the same Vladimir Putin who reassures Olaf Scholz and Mario Draghi that nothing changes, and the Kremlin spokesman, Dmitry Peskov, who speaks of a gradual implementation of payment in rubles. 

It is therefore in my opinion a bluff, of which Vladimir Putin is a great specialist.

As often, he makes a powerful statement to gauge reactions and adapt his strategy. 

Paris and Berlin claim to be preparing for a possible stoppage of Russian gas imports, do they have sufficient possibilities of withdrawal

It must first be said that if the Europeans have not imposed sanctions on Russian gas – which represents 45% of their imports – it is because they cannot do without it in the short term.

However, with the war in Ukraine, a plan is now on the table to significantly reduce this dependence in 2022, with a view to a total withdrawal of Russian gas by 2027. There are three levers for this: finding new natural gas suppliers, replacing part of the gas consumption with other energy sources, particularly renewable sources, and finally making savings on current consumption.

This strategy should reduce Russian imports by at least a third this year. 

As for new suppliers, a contract has already been signed with the United States for an increase in its deliveries of liquefied natural gas, which should eventually offset a third of current Russian imports.

Other potential partners include Qatar, Algeria, Nigeria, Egypt, Norway and even Azerbaijan. 

Russia is Europe's largest gas supplier and Europe its main customer.

In the current context of war, is Vladimir Putin really in a strong position on this issue

Russia is not in a strong position for a simple reason: it is even more dependent on the European market than Europe is on Russian exports.

In other words, Moscow has more to lose than Europe in this affair.

For the EU, it is of course not easy to turn the Russian page, but it already has sufficient infrastructure to increase its imports of liquefied natural gas, at least initially.

If these deliveries cost more, they have a major advantage: that of being more flexible, because delivered by boat and not through gas pipelines.

This flexibility allows greater security of supply, because it makes it easier to diversify sources. 

On the Russian side, the industry is mainly oriented towards Europe and large infrastructure investments will be necessary to massively export the gas by sea, which requires liquefying it.

Outside the EU, Moscow exports gas to Japan, Korea and China.

The first two, allies of the United States, will line up behind its position.

There remains China, which is certainly an ally of Russia, but with which discussions of trade agreements are not easy, especially if the balance of power is in its favor.

Of course, Russia will also prospect to find new customers, but its situation will be more difficult, because it has fewer partners than Europe, but also fewer potential partners. 

>> To (re)see

The summary of the

France 24 week invites you to come back to the news that marked the week

I subscribe

Take international news everywhere with you!

Download the France 24 app

google-play-badge_EN