News / Economy

    Analysts: Ukraine Dispute Not Likely to Cut Russian Gas Sales to Europe

    FILE - This Wednesday May 21, 2014 file photo shows a gas pressure gauge in Bil 'che-Volicko-Ugerske underground gas storage facilities in Strij, outside Lviv, Ukraine. Russia on Monday, June 16, 2014
    FILE - This Wednesday May 21, 2014 file photo shows a gas pressure gauge in Bil 'che-Volicko-Ugerske underground gas storage facilities in Strij, outside Lviv, Ukraine. Russia on Monday, June 16, 2014
    Analysts tell VOA that Russia should not make any attempt to interrupt natural gas deliveries to Europe as part of its dispute with Ukraine. Russia loses in any attempt to interrupt the flow of natural gas to Europe, said two analysts who spoke with VOA.

    Russia cut off the flow of natural gas to Ukraine this week after Kyiv failed to pay $2 billion it owes Gazprom, Russia's state-owned gas monopoly.

    Moscow has promised no disruption in service to its natural gas customers in the rest of Europe, but the Kremlin could change course if Ukraine tries to meet its energy needs by siphoning off gas from the pipeline carrying fuel to the West.

    About one-third of the European countries' natural gas supply comes from Russia, and half of that flows through a pipeline that crosses Ukraine.

    No 'dire' situation

    One analyst interviewed by VOA Wednesday, Gary Schmitt of the American Enterprise Institute in Washington, says Europe can manage its energy needs, no matter what happens.

    "This is not the optimal situation, but on the other hand, it's not simply the dire situation that it has been in the past," Schmitt said. "Europe actually could get by with a cutoff from Ukraine, partially because the weather has been much milder, but also because there have been these marginal increases in world gas supplies."

    Even if Russia cuts gas shipments to Europe, he predicted that countries in the European currency zone likely would not face any reduction in their ability to generate electricity.

    Europe already has terminals in place for liquefied natural gas (LNG) imports and has more under construction, Schmitt said. In addition, there are more pipelines in place linking energy producers to consumers than there were just a few years ago.

    Additional energy sources

    LNG imports are not yet extensive enough to replace Russian gas delivered by pipeline, the analyst conceded. "On the other hand," he said, "a lot of gas comes through a gas pipeline that avoids Ukraine altogether and goes straight into Germany. And that capacity is not, in fact, utilized fully."

    Tom Elliott with the deVere Group, a London-based international financial consultancy, agrees that any interruption in Russian gas deliveries to Europe would be only a temporary problem.

    "Let's assume Russia cannot maintain supplies to its European clients," he told VOA. "You suddenly find [that] other energy sources become valid."

    Still, Elliot said Western Europe and the Eurozone economies would be "vulnerable to Russia playing games with gas supplies" for a year or so.

    Will Europe pay Ukraine's gas bill?

    If Ukraine started siphoning off gas from the pipeline, and Gazprom responded by halting gas supplies to Europe through Ukraine, Elliott predicted, Europe would "probably pay the gas bill for Ukraine," and that would be money well spent.

    "It is a point not often made in the West, but the Russians are very conscious that the West has actually won the ideological and the political battle in much of Ukraine," Elliott said. Not in eastern Ukraine, but in the western part of the country. Under the circumstances, he added, the Western powers could cement those bonds with Ukraine by financing Kyiv's gas bill.

    Further, he says, by demanding that Ukraine pay for its gas in advance actually gives the Kremlin less leverage. Using the analogy of a drug dealer, Elliott said a supplier who extends credit to his customer can then "demand huge amounts of interest, and basically has the clients in a state of terror."

    Elliott said Russia would lose that advantage - and whatever geopolitical hold it still has over Ukraine - if it cuts off Kyiv's credit.

    You May Like

    US Leaders Who Served in Vietnam War Look Back and Ahead

    In New York Times opinion piece, Secretary of State John Kerry, Senator John McCain and former Senator Bob Kerrey say as US strengthens relations with Vietnam, it is important to remember lessons learned from war

    Who Are US Allies in Fight Against Islamic State?

    There is little but opportunism keeping coalition together analysts warn — SDFs Arab militias are not united even among themselves, frequently squabble and don’t share Kurds' vision for post-Assad Syria

    Learning Foreign Language Helps US Soldiers Bridge Culture Gap

    Effective interaction with local populations part of everyday curriculum at Monterey, California, Defense Language Institute

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8954
    JPY
    USD
    109.74
    GBP
    USD
    0.6851
    CAD
    USD
    1.3148
    INR
    USD
    67.673

    Rates may not be current.