EU nervous as Russia eyes new energy markets

As EU leaders prepare to meet in Brussels today (1 September) for an extraordinary summit on Russia, the country’s former president Vladimir Putin has indicated that Moscow wants to “diversify” oil and gas export markets.

Russia has “no intention” of limiting oil and gas exports to the EU and the country “will abide strictly” by its contractual obligations, former Russian president Vladimir Putin told the Interfax news agency on Sunday (31 August).

“But we are going to enlarge and diversify our export possibilities for these products which are so essential to the global economy,” said Putin, who on the same day reportedly called for the speedier completion of a new pipeline that will carry gas from Siberia to Asian markets. 

The comments are fuelling speculation that Moscow will increasingly leverage Europe’s dependence on Russia’s vast oil and gas reserves for geopolitical purposes, particularly if EU leaders today decide to impose sanctions on Russia for its actions in Georgia.

Russia is trying to downplay these fears. “We have worked for many years to gain not just the image, but the status of a reliable energy supplier to Europe and we would never let it suffer, even in this political situation,” Russian Energy Minister Sergei Shmatko said on 29 August. 

Despite these assurances, recent cutbacks in supplies to the Czech Republic (EURACTIV 31/07/08) as well as cuts in deliveries to Ukraine and Belarus, which left several European countries without supply (EURACTIV 11/01/07), remain fresh in EU leaders minds, making them nervous about the bloc’s dependence on Russian oil and gas. 

UK Prime Minister Gordon Brown told the Guardian newspaper on Sunday that “no nation can be allowed to exert an energy stranglehold over Europe”. Brown wants to see a greater diversification of fuel suppliers to the EU, which currently depends on Russia for 30% of its oil and 50% of its gas imports, according to the Commission. 

In addition to the construction of more oil and gas pipelines that would bypass Russian territory, a feasibility study is underway on the costs of creating large EU gas stockpiles for use in the event of a supply cut from Russia, the UK’s Daily Telegraph reported on 1 September.

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