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• EU has been discussing diversifying its suppliers, but that has not materialized
• Europe ‘cannot rely so much on a supplier that explicitly threatens us’ – EC president
On Thursday, the European Union said the bloc is ready in case Russia decides to cut off gas supplies to Europe in the wake of the Ukraine invasion.
“We have contingency plans in case of partial or full disruption of natural gas,” Kadri Simson, the EU’s commissioner for energy, told CNBC.
Europe receives most of its natural gas supplies from Russia, which accounted for about 43.4% of the EU’s natural gas stock in 2020.
“We saw from the previous situation when Russia occupied Crimea, and we introduced sanctions that there might be [a] retaliation from the Russian side, so, yes, we are ready that Russia’s retaliation might cover the energy sector,” Simson told CNBC.
After Western nations imposed a barrage of sanctions on Moscow for invading Ukraine last week, there is concern that Russia could hit back by cutting natural gas supplies to Europe.
Putting an end to dependency on Russia
For several months Europe has been struggling with higher energy prices, and the Russia-Ukraine crisis has put even more pressure on the sector.
The benchmark Dutch front-month gas contract hit a new high at $205 a metric ton.
The oil prices also surged, with global benchmark Brent crude hitting a record high of $119.84 per barrel, the highest level since May 2012.
Moreover, in 2020, Russia ranked third in terms of oil production worldwide, according to the U.S. Energy Information Administration.
Although the EU has repeatedly discussed the need to diversify its suppliers, the plan has not materialized.
However, amid the war on its eastern flank, the European Commission has said it wants to finally end its dependency on Russia.
“We cannot rely so much on a supplier that explicitly threatens us. This is why we reached out to other global suppliers,” European Commission President Ursula von der Leyen said earlier this week.
Picture Credit: The Moscow Times