By ANDREW KORYBKO*
The political consequences of Ukraine's decision to cut off Russian gas to Europe
Russia and the European Union will manage the last phase of the US-instigated divorce without much difficulty, but the US may offer to bring them back together by allowing its vassals to import Russian gas by pipeline in exchange for some concessions from the Kremlin in the energy sector and in Ukraine.
Experts are discussing Ukraine’s decision to cut off Russian gas supplies to Europe after Kiev refused to extend its five-year agreement with Moscow, which expired on the first of this year, with the vast majority of them placing the blame on the other side and exaggerating the negative consequences for their opponent’s interests. The reality is that this development is much more political than anything else, considering that the European Union and Russia have already faced much more serious disruptions throughout 2022.
The Yamal pipeline through Poland was shut down a few months after the start of the “special operation” for sanctions-related reasons, while Nord Stream 1 was gradually taken out of operation due to maintenance needs exacerbated by Canada’s delay in returning repaired gas turbines to Russia. That pipeline and the inactive Nord Stream 2 were then blown up in a terrorist attack in September of that year, although one still remains intact but has not yet been returned to operation for political reasons.
The combined effect resulted in a decline in the share of Russian pipeline gas in imports from European Union “from over 40% in 2021 to around 8% in 2023”, according to the European Council. However, European Union “narrowly avoided” a recession that year, in the words of CNN, although it could enter another later this year if Germany's economic difficulties deepen. Even so, it will not be directly affected by Ukraine's latest decision, as this route concerns only 5% of EU imports, with the main customers being Slovakia, Hungary and Moldova.
The first two are led by conservative-nationalists who are fiercely opposed to NATO’s proxy war against Russia through Ukraine, while the third is led by a pro-Western figure who wants to retake his country’s breakaway region of Transnistria, where thousands of Russian peacekeepers are still based. This observation lends credence to the earlier claim that Ukraine’s decision is more political than anything else, as it punishes Slovakia, Hungary and Transnistria without harming other countries.
The latter is being hit particularly hard, as it has had to cut off heating and hot water to homes, which could lead to political unrest manipulated from abroad to trigger a Color Revolution. This could result in regime change or weaken its regime from within enough to make it much easier for it to be invaded by Moldova (with possible Romanian assistance) and/or Ukraine. Russia’s Foreign Intelligence Service warned of this scenario last month.
Slovakia and Hungary will not be hurt anywhere as much as Transnistria, since each can import more expensive LNG – whether from Russia, the US (which has stolen much of its rival’s former EU market share), Algeria and/or Qatar – from Lithuania/Poland or Croatia. Poland can connect Slovakia to the Klaipeda LNG terminal in Lithuania, while the Krk LNG terminal in Croatia can supply both Slovakia and Hungary. Hungary is also already receiving some pipeline gas from TurkStream, which is Russia’s last pipeline to Europe.
All three are therefore being punished for political reasons, but it is only Transnistria that risks a full-blown crisis as a result, an outcome that causes political damage to Russia if its government is toppled by an imminent Color Revolution or if this policy is captured by its neighbors. Should another conventional conflict erupt, the aggressors may refrain from targeting Russian troops to avoid provoking an escalation, but Russia can always authorize them to intervene.
Observers can only speculate what Russia would do, as there are arguments in favor of withdrawing its peacekeepers if they are not attacked and Transnistria falls, but there is also a logic in sacrificing them as part of a plan to “escalate to de-escalate” the special operation on better terms. There is also the possibility that Transnistria will not go into a Color Revolution and will not be invaded either. A potentially major crisis would be avoided: this is the best scenario for everyone’s objective interests.
Regardless of what may or may not happen in Transnistria, Ukraine’s decision to cut off Russian gas to Europe raises the possibility that this route could be reopened once the conflict is over, thus representing a card that could be played to extract concessions from the Kremlin during negotiations. The same goes for the Yamal pipeline and the last undamaged part of Nord Stream. Europe could use low-cost Russian gas to more confidently avoid a recession, while Russia would appreciate the revenue.
Russia certainly still profits from LNG exports to European Union, which filled the supply gap caused by the European Union sanctioning its pipeline gas and Russia's LNG competitors being unable to scale their exports to the point where they can fully replace Russia's exports that European Union still matters out of necessity. That said, Russia and European Union would mutually benefit much more if they returned as much as possible to their pre-2022 agreement, while of course keeping in mind the contemporary political limitations to this.
America would have to approve this solution, as it has successfully reasserted its previously waning hegemony over the European Union since the start of the special operation. But creative energy diplomacy of the kind worked out last month could help lead to a breakthrough. The gist is that it is the United States that has an interest in making concessions to this end, not Russia, since the United States does not want Russia to further fuel China’s rise as a superpower, as it might do in return if it is not offered a good deal in Ukraine.
At the same time, it is unrealistic to imagine that the US will cede its influence over the European Union, why they can propose a compromise whereby Russia is not allowed to (re)gain control over the European portions of Nord Stream, Yamal and the Brotherhood and Soyuz trans-Ukrainian pipelines. The first could be bought by an American investor, while Poland can retain its post-2022 control over the second and the third would remain under Ukrainian control.
If the US really wants to encourage Russia to agree to this proposal, which advances US interests by increasing the chances that Russia will not build any more pipelines to China due to the need to replace its lost revenue from European Union, then they can partially compensate Russia by releasing some of its seized assets. Even though these assets are legally Russia’s and were stolen from it, the Kremlin may agree to such an exchange if a large enough sum is offered to help manage its latest fiscal and monetary challenges.
In exchange for the US returning some of the assets seized from Russia and authorizing the resumption by European Union In the absence of some Russian pipeline imports, Russia may have to informally commit not to build new pipelines to China, while also reducing some of its demands for the demilitarization and denazification of Ukraine. American, Indian and Japanese investment in Russia’s sanctioned Arctic LNG 2 megaproject could also replace frozen Chinese investment, if waivers are granted for this purpose as an additional incentive.
As long as Russia's main security goals are achieved, which are to restore Ukraine's constitutional neutrality and keep uniformed Western forces out of the country, then it may be willing to compromise on demilitarizing all of Ukraine, while being content with demilitarizing everything east of the Dnieper.
If Donald Trump offers to terminate the US bilateral security agreement with Ukraine as part of a package that includes the aforementioned terms, then Russia may well agree, as such an agreement would provide a mutual “savior” means of ending its proxy war while creating a basis for rebuilding relations. It is not a perfect compromise, and some of the supporters of each side may argue what is most beneficial to their opponent, but their leaders may think differently and that is all that matters in the end.
*Andrew Korybko holds a master's degree in International Relations from the Moscow State Institute of International Relations. Book author Hybrid Wars: From Color Revolutions to Coups (popular expression). [https://amzn.to/46lAD1d]
Translation: Arthur Scavone.
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