Russia Is Back to Blackmailing Europe Over Energy

For months, Europe’s response to the war in Ukraine has been shaped by one crucial question: What happens if Russia—which supplies 40 percent of Europe’s natural gas imports—decides to turn off the taps?

Their worst fears materialized this week when Russia severed Bulgaria and Poland’s natural gas supplies as punishment for refusing to pay in rubles. The Kremlin’s decision has both rattled and divided European leaders, who are now scrambling to determine when Russia could strike again—and who could be its unlucky next target.

Within Europe, “there’s a sense of foreboding,” said Nikos Tsafos, an energy expert at the Center for Strategic and International Studies. “We don’t know who. We don’t know when.”

European countries, most of which are already trying to wean themselves off of Russia’s supply, are deeply split over how to respond to the threat. The central debate is over whether to comply with one of Moscow’s key demands: paying for its natural gas in rubles, which could help it cushion the blow of Western sanctions. The European Union has warned that meeting Russian President Vladimir Putin’s demands would violate its sanctions against Russia, and many European countries have balked at the order. Germany, which receives more than half of its natural gas from Russia, accused the Kremlin of engaging in “blackmail.”

Russia, for years, has used energy as a weapon, but it’s a double-edged sword. Natural gas exports cannot be cut off as they supply hard currency. But Europe can’t quit Russian gas either. Given Russia’s tactical ineptitude, energy blackmail might be its last resort.

Energy exports are Russia’s “last mechanism to exert some kind of influence across Europe” outside of military action, said Olga Khakova, an energy expert at the Atlantic Council. “Oil and gas kind of are their biggest cards to play.”

Bulgaria and Poland, both of which refused to meet Russia’s payment deadline, were the first to fall. Without Russian gas, experts say neither country is in immediate trouble: Poland’s contract was set to end in the coming months, and both countries are expected to receive more gas from Norway and Greece. As the summer approaches, demand has also fallen, as natural gas isn’t as critical as it is during the freezing winter.

“It’s not a huge deal from the supply standpoint,” said Samantha Gross, an energy security expert at the Brookings Institution. “It’s more of a big deal symbolically and that they’re cutting off supply to a couple of EU members.”

But losing Russia’s supply will become more challenging for Europe as more countries push back against Putin’s energy blackmail. “Energy security in Europe is becoming a zero-sum game, where different European countries are competing over a finite set of supply,” Tsafos said. “Poland and Bulgaria, maybe they can make do. But if this goes bigger, that becomes so much harder to cope with.”

To avoid suffering Poland and Bulgaria’s fate, countries that are more heavily reliant on Russian gas are scrambling for workaround solutions. Some companies in Germany and Austria are now searching for ways to accept the Kremlin’s terms without breaching EU sanctions. Germany gets more than half of its natural gas from Russia, and Austria depends on it for 80 percent. 

On Thursday, the German economy minister, Robert Habeck, said Germany could meet Putin’s demands in a way that is “compatible with sanctions,” though a spokesperson for the European Commission later said any ruble payment would run afoul of EU sanctions. Poland, one of the staunchest critics of Europe’s reliance on Russian energy, has also insisted countries that agree to pay Moscow in rubles should be punished.

EU energy ministers are now preparing to meet on Monday to clarify their stance and guidelines, which other officials have called confusing and ambiguous. The European Commission is also preparing a sixth package of Russian sanctions that is expected to target the country’s oil sector and banks while European Commission President Ursula von der Leyen vowed to end their reliance on Moscow.

“It comes as no surprise that the Kremlin uses fossil fuels to try to blackmail us,” von der Leyen said. “The era of Russian fossil fuels in Europe will come to an end. Europe is moving forward on energy issues.”

But until European leaders can fully wean themselves off of Russia’s supply, experts say they will continue to be trapped.

“You can sense the unsustainability,” Tsafos said. “But it’s really hard to know just how quickly the dominoes are going to fall.”