Moscow is now threatening to “freeze” all energy exports to Europe if the continent decides to put a price cap on Russian gas supplies.
This comes after Russia completely stopped the flow of gas heading to Germany and through to the rest of Europe through its Nord Stream 1 pipeline last week.
Russian president Vladimir Putin said on Wednesday: “We will not supply anything at all if it is contrary to our interests.
“No gas, no oil, no coal, no fuel oil. Nothing.”
While Putin’s threat is linked to all of Russia’s energy exports, it is mainly the country’s supply of natural gas which Europe has become dependent upon over the years.
No.10 already announced it would be banning Russian oil by the end of the year to focus on US and Middle Eastern supplies, but it has not yet agreed to completely ban Russian gas – it is just attempting to move away from it.
The West has been imposing tighter sanctions on Putin’s regime ever since he ordered the unprovoked invasion of Ukraine. It has been simultaneously attempting to wean itself off the amount of oil and gas (also known as hydrocarbons) it gets from Russia at the same time.
Trying to move onto other energy sources has already thrown up significant problems, such as the UK’s soaring energy price cap which could exceed £4,000 come January and global wholesale gas prices climbing.
The more Putin puts the squeeze on his gas exports, the harder it is for Europe, something the Kremlin is all too aware of.
But, Europe saw this coming and has been trying to establish independence away from Russia.
Here’s what all this means for the UK.
How much does the UK actually use Russian gas?
Russia is Europe’s largest supplier of natural gas as it provides just over a third (35%) of its supply.
But the UK needs only 3% of its supply from Russia – the rest comes from the North Sea, Norway or Qatar and the US.
Most of the UK imports comes in the form of liquefied natural gas, a supply which is sold to those offering the highest price.
The UK did also manage to stop all imports coming from Russia altogether in June alone – but, when demand is higher come winter, this might be a more challenging feat.
Why is it important to stop using Russian gas?
While the West has been turning up the pressure on Russia through its array of sanctions, Moscow has still receiving vast sums from Europe in exchange for access to its gas supplies.
Finnish researchers believe Russia has made £136 billion from surging fossil fuel prices during its invasion of Ukraine, and EU imports account for more than half of that.
As POLITICO journalists previously pointed out: “One of the darkest ironies of Russian president Vladimir Putin’s war in Ukraine is that Europe is helping fund the Kremlin’s war machine through energy payments.”
It’s believed the main thing preventing Putin from turning off the gas permanently is both the money it brings in and the pressure it allows him to put on Europe.
But, as Russia’s energy market has become a means of leveraging the west, it is clear that Europe must look elsewhere for supplies.
Russia accounted for 40% of the EU’s imported gas prior to the invasion, but that is now down to only 9% as the bloc has moved away from the country’s supplies.
What happens if the West boycotts it?
Although Russian gas only makes up a tiny portion of the UK’s total gas supplies, the British market is closely aligned with mainland Europe’s market.
If gas prices rise in Europe due to limited supply, the prices will climb in the UK too.
Gas prices rose just two weeks into Putin’s invasion due to Europe’s sanctions against Russia.
And, back in March, Boris Johnson also warned: “There are different dependencies in different countries, we have to be mindful of that.
“You can’t simply close down use of oil and gas overnight, even from Russia. That’s obviously not something every country around the world can do.”
He said: “We need to do is make sure we’re all moving in the same direction, all share the same assumptions, that we accelerate that movement.”
The prime minister also noted that there would be “a transition period” while governments looked for substitute supplies, although these alternatives – such as wind turbines and nuclear power – have been criticised by senior members of government.
What are the alternative energy sources?
The most obvious solution would be to fulfil the climate change pledges to go net-zero with fossil fuels. However, that is a long and costly mission which might not have an impact on Russia for some time to come.
Instead, the UK could move to gas from the North Sea, relying on a temporary ‘climate change pass’ as they transition away from Russia dependence.
Accelerating cheap renewables and turning to nuclear power would also help provide more energy security away from Russia.
Some have called for fracking to return or oil reserves in the North Sea to be exploited, but these are deeply controversial opinions due to the environmental damage that accompanies such a move.
Norway has also indicated that it might be willing to discuss long-term gas agreements and price caps, which could help reduce UK prices.
What are other countries doing?
The West has signalled repeatedly that it wants a united approach, and US President Joe Biden announced a ban on all Russian oil and gas early this year.
Canadian prime minister Justin Trudeau and his Dutch counterpart Mark Rutte previously agreed that the West should have a united approach to withdrawing from Russian supplies.
However, Rutte also noted that a full boycott would have “unmitigated risks”, just as Germany’s chancellor Olaf Scholz claimed – his country may have halted the approval of the major gas pipeline, Nord Stream 2, but is having to take a slower approach when detangling itself from Russian gas altogether.
Its dependency has dropped from around 55% in February to around 26% in August, but it will not be fully free until around mid- 2024.
It comes after the G7 announced a price cap for Russian oil last week.
In a marked change from Germany’s previous cordial trade relationship with Russia, Scholz said: “Something that held true throughout the Cold War no longer applies. Russia is no longer a reliable energy supplier. That is part of the new reality.”
President of the European Commission, Ursula von der Leyen, is pushing for a price cap on the Russian gas, explaining: “We must cut Russia’s revenues which Putin uses to finance this atrocious war against Ukraine.”
On Friday, EU energy ministers are going to meet and try to decide how to look after consumers and businesses across the winter.
What has Russia said?
Last week, the Kremlin promised to meet its energy obligations and refuses to admit that the brief interruption to Nord Stream 1 supplies – which has now become permanent – is related to politics.
Now, Putin’s threat to cut off all energy supplies seems to suggest a change in direction, as Moscow piles the pressure onto Europe in the hope it will cut off support for Ukraine.
However, the Kremlin denies any charges of “weaponising” its gas exports.
Putin also dubbed the sanctions as economic aggression, and said the quality of life for Europeans was decreasing.
“Now we are seeing how production and jobs in Europe are closing one after another.”
He also said that while inflation was increasing in Russia, he claimed sanctions were not having a major impact on Russian businesses, alleging: “I am sure that we have not lost anything and we will not lose anything.”