NW Week

Thursday, February 22, 2024

If Russia cuts gas supplies to Europe, it will be a “disaster,”

If Russia cuts off gas supplies to Europe, it will be a 'disaster.

Key takeaways:

  • Naftogaz, Ukraine’s largest oil and gas company, met the man keeping much of the world guessing in a dramatic, high-stakes geopolitical chess match.
  • The energy relationship between the two countries is well-established and profitable. Doing business with the enemy may even come as a shock to some.

In a dramatic, high-stakes geopolitical chess match, Naftogaz, Ukraine’s largest oil and gas company, arrived face-to-face with the guy who is keeping much of the world guessing.

“I would describe him as a bully,” Vitrenko said of Russian President Vladimir Putin. “Alpha.”

Vitrenko stated he was trying to gather billions of dollars from Gazprom, Russia’s state-owned gas company, from an ultra-modern company meeting room with a panoramic view of the Ukrainian capital. He was eventually compensated.

The two countries’ energy relationship is firmly established and lucrative. It may even arrive as a surprise to some: doing business with the enemy. Russia pays Ukraine US$2 billion in “transit fees” each year in exchange for the ability to transport its product through Ukrainian pipelines. 

Also read: GoFundMe for the removal of Canada’s trucker convoy due to ‘terms of service’ violations

Ukraine does not use that oil and gas. Much of the rest of Europe, on the other hand, does. Russia provides about a third of the natural gas consumed by the European Union. And Ukraine accounts for about a third of that.

As the standoff between Russia and Ukraine worsens, there is growing concern that Putin will turn off the taps and cut off supplies to Europe, which has been supporting Ukraine diplomatically and militarily through NATO, as Russia beefs up its border with more than 100,000 troops.

“It will send gas and oil prices even higher,” Vitrenko admits if Russia uses gas as a “weapon.” The impact could be devastating in the winter when millions of people rely on natural gas to heat their homes.

There’s also the financial impact. “We are by far the largest taxpayer and one of the economic pillars,” Vitrenko says, adding that Naftogaz pays the same amount in taxes as Ukraine’s military.

Putin has leverage because no one knows whether he will start an energy war with his largest continental customers. However, the US is already working with its energy partners in North Africa and the Middle East to bolster European supplies demonstrates genuine concerns.

If Russia cuts off gas supplies to Europe, it will be a 'disaster.
If Russia cuts off gas supplies to Europe, it will be a ‘disaster. Image from iHeatradio

According to NATO Secretary-General Jens Stoltenberg, “demonstrates the vulnerability of being overly reliant on a single natural gas supply.”

Another source of concern for Ukraine is Nord Stream 2. Although gas has yet to flow through the $14 billion pipelines from Russia to Germany, Ukraine sees it as a potential security threat if as well as when it does, because it completely bypasses Ukraine, potentially making it less relevant in Europe’s eyes and thus less necessary to defend, according to Vitrenko.

“When Russian gas flows to Europe through Ukraine, we recognize that we are in some ways in the same boat as Europe, and they will feel the effects of a full-fledged… war right away.”

Vitrenko is grateful for Canada’s contribution thus far, which includes a three-year extension to Operation UNIFIER, but he also wants Ottawa to commit to sending lethal weapons. Anita Anand, Canada’s defense minister, says the option is “on the table,” but she hasn’t given any firm commitments or indicated what criteria Canada would use to make that decision.

Vitrenko says, “Canadians are portrayed as very peaceful and not aggressive” in Due South, a Canadian show he used to watch “with horse police.”

“However, Canadians, contrary to their nature, imply that you must be strong and sometimes even tough.”

Vitrenko wonders what Canada’s next move will be, just as he does about Russia’s.

Source: CTV News

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