EU prepares extraordinary measures against gas retaliation

The European Union is bracing for potentially serious economic consequences if Russia cuts off natural gas supplies in retaliation for sanctions.

The 27-nation EU is braced for several possibilities involving disrupted gas deliveries from its biggest supplier following Russia’s invasion of Ukraine, the bloc’s energy commissioner Kadri Simson told Bloomberg News on Thursday.

One scenario assumes that the Kremlin stops gas flows to Europe altogether.

“This option definitely means that we have to take all the measures that are at our disposal”, he said during an interview. “This will have a strong impact on consumers and the economy. But, it goes without saying that if there is a war going on in the neighboring country, you must be prepared to take extraordinary measures yourself.”.

The EU depends on Moscow for about 40% of its gas imports and is stepping up efforts to reduce that dependency. The European Commission, the bloc’s executive arm, is to adopt a new strategy on March 8 that would boost energy security, cushion the impact of rising gas prices and accelerate the buildup of renewables and energy efficiency.

The EU also plans to secure more imports from countries such as the United States, Qatar, Norway, Egypt, Algeria and Azerbaijan.

Moscow has given no indication that it intends to curb gas deliveries and, in fact, flows have increased since the February 24 invasion.

The sanctions imposed on Russia are “massive” and will have a strong impact on its economy, according to Simson. In the energy sector, they will make it difficult for the country to improve oil refineries, undermining its competitiveness and, in the end, affecting a very important source of income for the Kremlin.

The bloc is also prepared for oil supply disruptions, with member states’ emergency reserves exceeding minimum levels required by EU law and the International Energy Agency.

The commission has already started to put pressure on national governments to ensure that gas reserves are replenished when the heating season ends.

“On a day-to-day perspective, my concern now is how we can help Ukraine, in a week how we will prepare for retaliation and looking ahead a year how we will build our own storage and help our retail consumers.”, Simpson. he said. “If you ask if we will survive, yes, we will.”