Russian gas continues flowing to Europe through Ukraine

Seventeen days after Russia invaded Ukraine, Russian gas continues to flow to Europe through Ukraine. The fighting is hard, many of the Ukrainian cities are in a rubble, and because of the destruction of infrastructure in the urban areas, people have no electricity in the still bitingly cold days and nights. According to Ukraine’s state-owned gas firm Naftogaz, so long as operators of the gas networks continue to function, the gas will continue to flow.

The US has placed sanctions on Russian gas and oil exports, but the European countries have so far not done so. Ukraine is the key gas route to Europe, and it is estimated that so far in 2021, 41.6 billion cubic metres (bcm) of Russian gas passed to Europe through Ukraine. The high-pressure transit pipelines and the IT networks have not been damaged during the conflict, and according to Naftogaz head Yuiry Vitrenko, “Currently (Ukraine’s) decision is that while it is possible, we are providing transit.” Bu Vitrenko says that the payments due to Russian gas should be held back. Even as people go without gas supplies, heat and electricity in battered cities like Kharkiv and Mariupol, Vitrenko says, “Every day we send our employees under bullets to repair systems and then there is another bombing. They live in the cities. It’s really cold at night. Their families live in the cities and they know that if there is no heating it’s a human catastrophe.”

Vitrenko says that Russia cannot cut off gas supplies to Europe because then it would damage the wells. And he feels that the European countries should make the payments into an escrow account, and it should be paid to Russia only when it agrees to a ceasefire and withdraws from Ukraine. He also argues that Nordstream I which supplies gas directly to Germany should be brought under the sanctions regime, and that the gas supply should be re-routed through Ukraine so that Russia would be compelled to halt the war.

The Russia-Ukraine war has turned out to be the most complex war, where economic stakes are high for everyone. It is realised that economic sanctions against Russia would hurt Russia as well as the Western countries including the United States as well. But the West feels that economic sanctions are the one strong weapon it can wield and force Russia to seek peace. But so far it has not happened. Not all countries are willing to go with the Western countries. China and India and many others are only too willing to continue with their trade transactions with Russia. It is only Europe that will feel the pinch of the sanctions along with Russia and Belarus.

Meanwhile, Ukraine continues with its negotiations with Russia, and both sides seem to feel that they are moving forward however slow the pace and despite obstacles. There is a strong feeling in Ukraine, especially in Ukraine President Volodymyr Zelensky, that there would open a dialogue between Zelensky and Russian President Vladimir Putin. But the fighting is fierce and there are constant reports about the death of civilians. It is a surreal situation where fighting rages and talks continue. The European nations and the US had warned Russia that there would be harsh consequences if Ukraine was attacked, but now that Ukraine is under attack, the West has shifted the goalpost as it were. Now the West is saying that an attack on Poland would be viewed as an attack on all as Poland is a member of Nato. Of course, it is not clear whether Russia would want to expand the theatre of war into Poland. Russia is keen to subdue Ukraine whatever is the price to be paid.