Tuesday, October 3, 2023
 
 

Russian Energy Exempt From EU Sanctions

- Advertisement -

At the European Council meeting on 20-21 March, the Crimea crisis was discussed by EU leaders. However, the EU sanctions imposed on individuals over Russia’s annexation of Crimea from Ukraine will not affect EU-Russia energy relations so far.

Chief executive officers of Russia’s two biggest companies – Gazprom’s Alexei Miller and Igor Sechin of Rosneft – are notably absent from the final sanctions list.

Wim Vandenberghe, an energy expert on EU regulatory and competition law at Dechert LLP in Brussels, told New Europe on 21 March that both Russia and the EU do realise that they are energy interdependent and seek to avoid an energy war. “It’s not only a question for Europe about security of supply it’s equally a question for Russia of security of demand. In that view both sides will be careful a bit not to escalate it,” he said.

Vandenberghe reminded that soon after the European Commission launched a competition investigation against Gazprom there was some kind of escalation when Russian President Vladimir Putin adopted a decree on strategic sectors.

“That was a little bit of a power game between the two sides. But very soon it went silent and you can tell that both parties are working on some kind of settlement that is acceptable to Gazprom as well. And the EU is happy to do that rather than the formal decision,” Vandenberghe said, adding that is an example that Moscow and Brussels realise that energy is so important for both of them that they will take steps to diffuse any tension. “Especially on energy everything depends on trust and being reliable — as a buyer and as a seller and both sides realise that,” he said.

Regarding Crimea and whether the EU-Russia spat would prompt more EU pressure on Gazprom and its South Stream pipeline, Shane DeBeer, an expert on Russian law at Dechert LLP, told New Europe on 21 March that Gazprom was already under a great deal of pressure about unbundling and the anti-monopoly probe that he doesn’t believe that the Russian company will necessarily feel any worse pressure than before.

“How much you want to connect the approval process, the exemptions process on South Stream, with politics – they are saying that these decisions are not made on a political basis but there is a certain amount of discretion involved,” DeBeer said, reminding that the EU has made statements that the approval process is going to get stalled on South Stream.

“Gazprom obviously doesn’t like that because Russia’s policy generally – and Gazprom’s in particular – has been to have alternative pipelines in order to avoid exactly the problem that happened with Ukraine in 2009,” he added.

DeBeer noted that Russia’s pipeline capacity is far in excess of what the resource-rich country is capable of producing west of the Urals. “The reason for that is redundant pipeline capacity because of these kinds of problems – problems where the pipeline through Ukraine might get blocked,” he said. Russia’s Nord Stream gas pipeline, for example, is not operating anywhere near full capacity right now.

In addition, Vandenberghe said there is a whole set of EU rules that were imposed to make Europe’s internal gas market more stable.

follow on twitter @energyinsider

- Advertisement -

Subscribe to our newsletter

Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

Latest

Iran protesters mark anniversary of “Bloody Friday”

Residents in the southeastern Iranian province of Sistan and...

US announces Israel’s acceptance into the Visa Waiver Program

Israeli citizens will be allowed visa-free entry into the...

UN General Assembly 2023: More progress urgently needed on Sustainable Development Goals

The 78th United Nations General Assembly (UNGA) kicked off...

Don't miss

Iran protesters mark anniversary of “Bloody Friday”

Residents in the southeastern Iranian province of Sistan and...

US announces Israel’s acceptance into the Visa Waiver Program

Israeli citizens will be allowed visa-free entry into the...

UN General Assembly 2023: More progress urgently needed on Sustainable Development Goals

The 78th United Nations General Assembly (UNGA) kicked off...

Europe’s lawmakers see opportunity for regime change a year after Iran’s latest uprising

On September 21, representatives of various political groups held...

Interest surges in Turkmen gas

Turkmenistan's huge gas reserves have been generating considerable interest from potential importers following Ashgabat's announcement in late July that it is open to the development...

European aviation industry embraces new jet fuel regulation

The European Parliament on September 13 approved a new law to increase the uptake of sustainable fuels, such as advanced biofuels or hydrogen, in...

Nairobi Declaration calls for global tax on fossil fuel trade, maritime transport, aviation

As the curtains came down at the Africa Climate Summit (ACS23), heads of state and government adopted the Nairobi Declaration, calling on world leaders...

Mongolia to expand its economic and trade partnerships

Mongolia, the landlocked mineral-rich country bordered by Russia and China - the world's two preeminent authoritarian-run nations, is looking to expand its economic, trade,...

Turkmenistan signals major change in energy-export stance

A big shift is brewing for Caspian Basin energy exports. In a diplomatic about-face, Turkmenistan has signaled its readiness to develop a Trans-Caspian pipeline...

Can Central Asia escape China’s debt trap?

While Washington focuses on the war in Ukraine, Russia and China seek to expand their influence in regions where the US is not sufficiently...

Kazakhstan’s Deputy FM says EU & US ties remain strong as Central Asia’s largest country emerges as regional power

In the three-plus decades since Kazakhstan emerged as an independent nation from the ashes of the Soviet Union's 1991 collapse, the Central Asian giant...

Energy crisis prompts SMEs to boost renewables, energy savings

The energy crisis, high prices and threat of supply disruption following Russia’s war against Ukraine has prompted many small and medium-sized enterprises (SMEs) to...