The G7 countries and the European Union plan to ban the import of Russian pipeline gas in regions where Russia has previously reduced its supply. Finance Times with reference to sources.
“The decision by the G7 leaders at the Hiroshima summit next week (May 19-21) will prevent the resumption of gas exports via Russia’s pipeline to countries such as Poland and Germany,” the FT writes.
Fuel is supplied to these two countries via the Yamal-Europe pipeline. In addition, the publication could block Russian oil supplies through the EU and G7’s northern branch of the Druzhba pipeline, which supplies Germany and Poland. The newspaper draws attention to the fact that Western countries are ready to limit Russian gas trade through pipes for the first time.
According to the G7 draft declaration, G7 member states plan to further reduce the use of Russian energy resources, including to prevent “reopening roads previously closed due to Russia’s use of energy as a weapon”. The G7 countries plan to take such measures until the conflict in Ukraine ends.
At the same time, the initiative at this stage requires additional clarification. As one of the European diplomats told the publication, “it should be clear exactly how it will work,” as oil from Kazakhstan also passes through the Druzhba oil pipeline.
Does not affect existing deliveries
Poland and Germany have said in 2022 that they will voluntarily give up Russian oil through Druzhba, although sanctions do not prohibit them from buying pipeline oil. In February 2023, Daniel Obaitek, head of Polish oil refinery Orlen, announced that Russia had completely stopped oil exports to the country.
In this context, the decision of the G7 and the European Union is unlikely to affect the current gas supply. But the FT will highlight the EU’s determination to break free from “decades of dependence on Russian energy.”
The ban is highly symbolic, as the EU refrains from targeting pipelines at the start of the war as it is heavily dependent on gas from Moscow.
Now, the share of Russian gas in European imports has dropped from 40% to less than 10%. According to one of the newspaper’s sources, the decision of the EU and the G7 was taken to ensure that the partners “do not change their minds in the hypothetical future” to voluntarily reduce energy dependence on Russia.
In addition, while the conflict continues, Western countries want to reduce Russia’s revenues from energy exports and increase the economic pressure on Russia.
Several gas pipelines have been laid from Russia to Europe: Yamal-Europe, Nord Stream-1 and Nord Stream-2. The European Union has never ratified Nord Stream 2, and Russia has stopped deliveries via Nord Stream 1 in the summer of 2022. In September 2022, three of the four Nord Stream branches still under investigation were damaged by sabotage.
Against the backdrop of the sharp rise in gas prices, Europe accelerated the transition to renewable energy sources and increased its purchases of liquefied natural gas. According to the FT, European underground storage facilities are currently 60% full, despite being 30% full during the same period in 2022.
Oil sanctions
Bloomberg previously reported that the European Union is considering stopping oil supplies from Russia to Germany and Poland via pipelines. Such a measure could be included in the 11th package of sanctions.
At the same time, exceptions that allow pumping from the southern branch of the Druzhba oil pipeline to Hungary, the Czech Republic and Slovakia will remain in effect, according to the agency, which cites classified documents.
Poland called for sanctions against pipeline oil from Russia in the fall of 2022, this would give Warsaw the legal basis to terminate its contracts with Moscow without penalty.