Russia’s demand that “unfriendly” states should pay for Russian gas supplies in Russian rubles “is of course a sticking point” that might lead to a worsening of the confrontation, said WIIW economist Vasily Astrov. According to Russia expert Alexander Dubowy from the Society for Eurasian Studies (EURAS), the war in Ukraine is increasingly becoming a proxy war.
In principle, there is no “so-called unfriendly country”, i.e. no EU country, which “might not be affected by the gas sanctions”. Austria and Germany are also not fundamentally immune to being cut off from energy supplies, said Dubowy. Russia will “continue to use energy supplies as a foreign policy weapon in the future, probably much more than before”.
No more gas for Poland and Bulgaria
The next escalation in the wake of the Ukraine war came with a stop in the supply of Russian gas to Poland and Bulgaria. Russian gas continues to flow to Austria, politicians emphasize. According to a study by the Energy Agency, Austria might also get by without Russian gas, but only from 2027.
“Symbol policy”
The more the conflict between Russia and the West escalates, “the more Russia will be willing to jeopardize its long-term energy relations.” The gas stop for Poland and Bulgaria allows Putin to use it for “internal propaganda purposes,” said Dubowy. “Russian state propaganda will book it as a great victory for Vladimir Putin and Russia.” It is regarding sending a signal and threatening all EU states, explained Dubowy.
“This whole discussion of whether to pay something in rubles or dollars or euros is a bit of a virtual discussion,” Holzner said. In fact, not much changes for the states if they deposit the amounts in euros and dollars into an account at Gazprombank, which is not included in the EU sanctions, which converts them into Russian currency. From a purely economic point of view, the discussion regarding it doesn’t make much sense, it’s more regarding “symbolic politics”.
By stopping gas deliveries to Poland and Bulgaria, Russia is testing how serious the EU is regarding the sanctions, said Holzner. Poland wanted to stop receiving gas from Russia soon anyway, so that’s only symbolic. “Bulgaria is the weakest link in the chain, it’s the poorest country in the European Union, so that’s more of a symbolic thing,” said Holzner.
“Everything depends on Germany”
“Ultimately nobody will ask Austria either, it will all depend on the decision in Germany.” If Germany decides on an embargo, “then Austria, the Czech Republic and Slovakia will also follow”. A total embargo on oil and gas would make things very tight for Russia, Astrov added.
40 percent of the Russian state’s income comes from the energy sector – but this also includes sales in Russia. In the event of a total embargo by the EU, around 15 to 20 percent of Russian state revenues would be lost, according to Astrov. Holzner also does not believe that a total embargo would stop the war. “I don’t think Russia can be forced into anything. It is always Russia’s sole decision what to do.”
Russia can even benefit
From the point of view of energy expert Walter Boltz, however, Moscow might even benefit from the current interruption in Russian gas supplies to Poland and Bulgaria. The announcement alone would probably cause gas prices to rise a bit further in the next few days, so that Russia would not lose any money overall. “That shows the bizarreness of the situation,” said the former E-Control board member on Wednesday. The pressure on a gas embargo will certainly increase once more.
Boltz believes it is possible that Austria can do without Russian gas by 2027, as calculated by the Austrian Energy Agency in a study for the Ministry of the Environment. Technically, this is certainly feasible, he said in the Ö1-Mittagsjournal of the ORF radio, since the quantities would have to be replaced by gas from other sources. However, when it comes to the question of high savings potential through energy efficiency or the question of who should save how much, he “lacks the imagination a bit”.
Replacing the necessary quantities of gas with a purchase on the world market within three or four years would be “relatively easy to implement”, said the energy expert. There are pipelines to Italy, also to Germany, Slovenia and Croatia. “With intensive efforts, it should not be that difficult to obtain these quantities of gas on the world market.”
power generation and industry
The core is the use of gas for power generation, district heating and industry. And in industry, large-scale savings within four or five years would probably only be possible by relocating production to other countries. When it comes to electricity, the question is where else it should come from. The only thing that would then be conceivable would be imports, from countries that might put more coal-fired power plants into operation.
Gewessler: “No signs of stopping”
According to Energy Minister Leonore Gewessler (Greens), Austria is not affected by the Russian gas supply stop to Bulgaria and Poland. “We have no signs that Russia is cutting back on Austria’s gas supply,” she said in ZIB2. “But we are preparing for emergencies.” Because: “None of us have a crystal ball,” says Gewessler.
The uncomfortable truth is that if Russia cuts supplies overnight, Austria cannot compensate for the loss. “The whole government is working to prevent that.” Storage is currently at the beginning.
ZIB2 interview with Minister of Energy Gewessler
Energy Minister Leonore Gewessler (Greens) says in the ZIB2 interview that an exit from Russian gas is a “national tour de force” and cannot happen overnight. When asked if there were any signs of a delivery stop for Austria, she said: “No, we do not have these signs.”
At the same time, the minister pointed out that no Russian oil has been processed in Austria since March. “The situation is different with gas. We have built up a dependency on Russia over the years with long-term contracts. These are prerequisites that cannot be changed in a few weeks.” A withdrawal from Russian dependence is a “national tour de force”. In the end, it’s regarding every gas boiler and every degree of temperature at home.