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Fuelling To Flame

The Great Game of Geopolitics

Well, fuel has become a crucial weapon of modern warfare. On April 27 (2022), Russia cut off gas supplies to Poland and Bulgaria, after these countries criticised the Kremlin for launching a military operation in Ukraine. According to sources close to Moscow, at least four European energy companies have secretly negotiated with the Government of Russia in order to ensure the supply of gas after President Vladimir Putin took action against Warsaw and Sofia. Even those companies have made advance payment in Rubles.

Reports suggest that 10 European companies have opened bank accounts with Gazprom, a Russian majority State-owned multinational energy corporation headquartered at the Lakhta Centte in Saint Petersburg, to pay fuel prices in the Russian currency. As a result, Russian energy supplies to four European countries would remain intact until the second week of May 2022. Gazprom authorities have confirmed that it stopped supplying gas to Poland and Bulgaria after they failed to make payments in Rubles.

Vladimir Putin

Meanwhile, the European countries have denied Gazprom’s claim, saying that the Kremlin had threatened that those who would side with Ukraine would have to suffer the consequences immediately after launching the military operation in the neighbouring country. According to a statement issued by Bulgaria, Sofia signed an agreement with Moscow to ensure an uninterrupted supply of fuel in the past. Hence, Russia violated the contract by cutting off the gas supply.

President of the European Commission (EC) Ursula von der Leyen has made it clear that member-states of the European Union (EU), together, would give a fitting response to Russia for action taken against Poland and Bulgaria. A day after the EC president made the announcement, several European companies struck a secret deal with Russia. Some German and Austrian companies, too, have agreed to make payments in the Russian currency. Germany’s Uniper SE and Austria-based integrated oil and gas company OMV AG have already opened accounts at a Russian bank, having a branch in Europe. Even an Italian energy company has agreed to pay fuel prices in Rubles.

Earlier, the US and its Western allies urged other countries to snap trade ties with Russia in protest of the attack on Ukraine. Although some countries accepted the request, the majority of the Asian countries refused to snap ties with Russia. Under such circumstances, some European countries’ decision to accept President Putin’s terms and conditions in order to ensure a steady supply of energy from Russia is certainly a huge blow to the US.

Political analysts are of the opinion that Energy Politics helps Russia counter the US’ move to impose economic sanctions on the Kremlin. It seems that it would be difficult for Washington DC to put Moscow under diplomatic and economic pressure in the coming days.

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