EU ministers seek response to Russia’s energy threat

European Union (EU) energy ministers today discussed a response to cutting Russian gas supplies to Poland and Bulgaria, as well as alternatives to reducing Russia’s dependence on hydrocarbons, as part of a new package of sanctions over the war in Ukraine. .

The meeting is the first in the industry since Moscow cut off supplies to those countries that refused to pay in rubles, a new Russian demand.

“We call for an immediate embargo on Russian oil and gas. The time has come for oil, soon it will be for gas,” said Polish minister Anna Moskwa.

However, Moskwa claims that his country’s reserves will be at 100% of their capacity “this winter” boreal.

“American gas has started to arrive through Lithuania and we are going to get gas from Norway through Denmark,” he said.

payment mechanisms

The EU claims that contracts concluded by European companies are generally agreed in euros or dollars, so the European Commission considers that the conversion mechanism imposed by Moscow justifies the imposition of sanctions.

Based on this understanding, Poland and Bulgaria paid for their purchases in the currency provided for in their contracts with Gazprom and refused to open a second account in rubles.

In retaliation, the Russian gas company found that it had not received payments and suspended its deliveries.

At this meeting, ministers must decide whether there is a problem with opening a second ruble account and whether Gazprom should accept payment in euros or dollars, as stipulated in the contracts, a European source said.

“No company or country intends to open a ruble account,” said European Energy Commissioner Kadri Simson.

reduce dependency

Ministers are also expected to agree on a gradual end to purchases of Russian oil and derivatives, but no decision is expected by the end of this meeting, French minister Barbara Pompili said.

Spanish minister Teresa Ribera highlighted that the issue “of sanctions is not the responsibility of energy ministers”.

Map Russia invades Ukraine - 26.02.2022 - Arte UOL - Arte UOL
Image: UOL Art

His German counterpart, Robert Habeck, highlighted that “we have significantly reduced our dependence on Russian oil and are creating the necessary conditions to also support an embargo”.

In 2021, Russia supplied 30% of the oil and 15% of its derivatives purchased by the EU.

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