Europe’s push to wean itself off Russian energy is a game-changer, says senior US official
Europe’s efforts to wean itself off Russian energy since the start of the war in Ukraine have been a “geostrategic game-changer”, a senior US State Department official said, noting that it is unlikely that Moscow is able to fill the demand gap immediately. future.
In an interview with the Financial Times, Derek Chollet, the adviser to the US State Department, said: “It will not be easy for Russia to find other buyers of its energy. China won’t be a good option anytime soon, given that the infrastructure doesn’t exist for Russia to get its gas to China.
“If one of Russia’s greatest strengths over the past decade or decades has been as an energy supplier, it is insulating itself from that market,” he added.
The comments came as tensions between Russia and the West over energy have escalated in recent days. On Wednesday, Moscow cut off gas supplies to Poland and Bulgaria, which European Commission President Ursula von der Leyen called “blackmail”.
Prior to Russia’s invasion of Ukraine, 97% of European purchases of Russian gas were made in euros or dollars. However, under a rule introduced by Russian President Vladimir Putin on March 31, gas buyers must now make their purchases in roubles.
In order to do so without paying Russia directly in rubles – which would violate European sanctions – Moscow has proposed a two-tier system that involves opening accounts in rubles and euros at Gazprombank in Russia.
Several European countries had planned to comply with the arrangement. But on Thursday, the EU warned European buyers that even under the new mechanism they would still breach the sanctions because converting euros into rubles would involve the Russian central bank’s involvement.
“We were quite reassured by the strength of the Europeans. The EU has been very clear that it is seeking to wean itself off Russian energy,” Chollet said. “It surprised a lot of people how willing they were to start the process of weaning off Russian energy and I think they’re about to do that over time.”
He added that Russia’s strategy of demanding that it be paid in rubles is unlikely to be sustainable as it hampers its ability to derive crucial revenue from energy sales abroad.
“Russia depends on selling its energy for its revenue, so there are limits to what Russia can do without it hurting them more than the Europeans,” Chollet said.
Washington is working with the European Union to close any potential sanctions loopholes related to the purchase of Russian gas.
“We are looking at all the options we can, if all the options include new sanctions and new designations as well as strengthening those sanctions already in place,” Chollet said.
When asked if this would include secondary sanctions, he replied that the United States “hasn’t taken that step”, but will look into it as part of its efforts to ensure that the sanctions hold over time.
EU officials have consulted with the United States on the possibility of using the threat of US secondary sanctions against countries that may be tempted to buy Russian oil – the next target of EU sanctions in progress. being prepared and likely to be adopted next week.
Those discussions are continuing on how best to design the restrictions so as not to create a rise in the world price of oil and to help, rather than hurt, Putin’s war funding, European diplomats said.
Additional report by Valentina Pop in Brussels