U.S. Says Any Russia Sanctions Wouldn’t Crimp Europe Energy
(Bloomberg) -- The U.S. is seeking to reassure European allies that any potential sanctions against Russia if it attacks Ukraine won’t disrupt short-term energy supplies on the continent, a hard promise to keep as winter sets in.
The U.S. is working to come up with contingency options in case President Vladimir Putin decides to cut energy supplies to Europe in response to Western nations pressing back on an invasion of Ukraine by limiting the sale of technology Russia needs for its energy sector, according to two Biden administration officials who briefed reporters Wednesday on condition of anonymity.
While Europe depends on Moscow for critical gas supplies, particularly in winter, Russia can ill afford the hit to its economy from restricting energy sales to the West, according to a person familiar with the administration’s efforts. The U.S. goal would be to ensure that any penalties be strong enough to show Western resolve against Russia while limiting the impact on Europe, the U.S. and the global economy, according to the person.
That would be a hard balance to strike. Russia is already limiting gas deliveries to Western Europe, the head of the International Energy Agency said Wednesday. IEA Executive Director Fatih Birol told reporters that Russia could boost gas deliveries to the continent by at least a third from current levels, but it’s keeping spot sales capped despite high prices.
Russian gas supplies to Europe dropped 25% in the fourth quarter of 2021 from a year earlier and are down 22% compared pre-pandemic levels, according to the IEA. Putin has said European clients haven’t been seeking more gas shipments from Gazprom PJSC.
A decision by Putin to weaponize his energy supplies following an incursion in Ukraine would just stiffen Europe’s resolve to find more reliable energy supplies elsewhere, according to the person familiar with the U.S. effort.
The assurance to allies comes after the U.S., NATO and Russia ended a first round of talks Wednesday aimed at easing tensions over Moscow’s buildup of more than 100,000 troops on Ukraine’s border. Discussions in Brussels concluded without a date for follow-up talks, though there will be a meeting of the Organization for Security and Cooperation in Europe on Thursday over the issue.
Separately on Wednesday, the Biden administration said it would support legislation proposed by New Jersey Senator Bob Menendez that would enact sanctions on the Nord Stream 2 pipeline from Russia to Germany if Putin attacks Ukraine. That pipeline, long opposed by the U.S., is nearly complete and awaiting environmental approval in Germany.
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