Researcher Veli-Pekka Tynkkynen says that Moscow’s strategy was successful because the West did not stop the oil trade immediately after Russia attacked Ukraine in February.
Sari Taussi,
Jyrki Saarikoski
A new threat has risen on the horizon of Europe, which is preparing for the winter season. First, Russia reduced its gas supplies, now it is already reducing them completely.
A significant part of Europe’s energy is produced with natural gas. When the price of gas has risen as a result of the Russian attack, electricity is also more expensive all over Europe than before.
At the same time, the energy crisis has highlighted a dependency relationship that should have benefited both the West and Russia.
Familiar with Russian energy policy Veli-Pekka Tynkkynen says that Europe’s reluctance to engage in tougher sanctions has given an advantage to Russia, which is waging a war of aggression.
In this story, we find out how Russia built an energy weapon, the tip of which is natural gas.
Nord Stream was also a German dream
The background of the Nord Stream 1 gas pipeline, which was completed ten years ago, was the gas trade between the Soviet Union and Germany, which led to the construction of the pipelines from Russia to Central Europe through Belarus and Ukraine.
However, Germany wanted a direct gas connection from Russia, because it thought that trade would be done this way without intermediaries and cheaper. President of Russia Vladimir Putin on the other hand, wanted to bypass Ukraine, whose reputation as a partner was tarnished by Russia.
– Ukraine has certainly had its own energy corruption, but in addition to that, Russia played so that Ukraine appeared as a suspicious actor, says Veli-Pekka Tynkkynen, professor of Russian environmental policy from the Aleksanteri Institute of the University of Helsinki.
With these backgrounds, the Nord Stream 1 pipeline project was launched. The 1,200-kilometer-long pipeline from Vyborg in Russia to Greifswald in Germany was opened in 2011.
Nord Stream 2, which runs along roughly the same route, is practically ready, but Germany finally stopped the commissioning of the much-criticized pipeline just before Russia’s invasion of Ukraine.
The majority shareholder of both pipelines is the Russian state oil and gas company Gazprom.
It was believed that interdependence benefits everyone
In addition to the economic benefit, Germany sought with the Nord Stream project that the common interest would be appropriate to appease Russia.
Tynkkynen says that the Germans thought they could manage risks related to Russia with the help of a joint energy project.
He reminds that Germany’s idea of interdependence was still strong a few days before Russia launched a major attack on Ukraine on February 24.
According to the researcher, Russia’s goals were helped by Germany’s foreign policy line “Ostpolitik”, as well as the Eastern policy of Finland, Italy and France.
– Russia wanted to not only make money with the gas trade, but also to hook Europe so that the countries do not go looking for energy elsewhere, Tynkkynen says.
For this reason, Russia has offered energy – in addition to gas, also oil and uranium – slightly cheaper than others.
According to the researcher, the situation now is that Russia is especially playing against Germany when it shuts down Nord Stream number one.
– The idea is that German support for Ukraine would weaken, both moral support and especially military support, he says.
Russia’s energy income has increased
Russia’s war of aggression prompted the West to impose economic sanctions. Despite them, Moscow has managed to significantly increase its income from the sale of energy.
According to researcher Veli-Pekka Tynkkynen, this is also due to the fact that sanctions were not imposed quickly enough.
The key reason for the success of Russia’s strategy is that all energy trade was not stopped immediately in February, says Veli-Pekka Tynkkynen. The purchase of oil is not scheduled to end until the end of this year.
– Of course, closing the faucets completely would have been financially difficult and a big shock for the German chemical industry, for example, but according to many experts, it could have been managed, says Tynkkynen.
In addition, Russia has been able to direct its oil flows elsewhere since February. It has been able to export oil to China and India on Greek tankers, for example.
Even in the middle of the war, Russian gas flows
Despite Russia’s extensive offensive, Russian gas still flows through Ukraine. The address is Hungary.
Prime Minister of Hungary Viktor Orbán increases the purchase of gas, even as other EU countries try to get rid of Russian fossil energy.
– This is an exciting situation. Despite the war, Russian gas is piped through Ukraine, says Tynkkynen.
He estimates that Ukraine also benefits financially from transfer payments, and that in this situation every euro and dollar is worth its weight in gold.
Another eager buyer of Russian gas is Turkey.
According to Tynkkynen, also the president of Turkey Recep Tayyip Erdoğan has joined Putin’s “fossil populism” and wants to increase gas imports from Russia.
However, the gas purchased by Turkey is not delivered through Ukraine, but through a pipeline laid at the bottom of the Black Sea.
Gas exports to many countries are already suspended
In addition to Germany, exports have now been suspended indirectly to, for example, France. Already in May, exports to Finland and Poland and Bulgaria were suspended, when the countries did not agree to Russia’s demand to pay for gas in rubles. Russia turned off the taps.
Europe has a complex gas network where gas is transported in different directions. For example, gas from Germany has been exported to, for example, France, Austria and the Balkan countries.
The sanctions aim to affect the entire Russian energy industry
Many kinds of sanctions have been applied to Russia. In addition to the trade embargo – not buying from Russia – there are financial sanctions and technological sanctions.
The aim of the financial sanctions is to prevent Russian companies from receiving money from international markets.
The technological sanctions aim to ensure that technology from, for example, Europe, the United States and Japan is not sold to the Russian oil and gas industry.
These sanctions will not have an immediate effect, but in, say, five years, Russia may be in trouble. Even now, Russia has blamed the sanctions on the difficulty in maintaining the Nord Stream pipeline.
The so-called indirect sanctions also aim to prevent Russia from acquiring the technology it needs from, for example, China.
What thoughts does the topic evoke? You can chat here until Friday 9 September 2022 at 11 pm.