Russia-Europe Gas Trade: Top Facts, Immunity to Political Sanctions

The Russia-Europe gas trade is vital to Moscow and European countries, but Russia still holds the cards despite political sanctions.

It is all about geopolitics which is the undertone between Moscow and many European countries dependent on supply pumped through pipelines. The Kremlin ensured that the European Union remained dependent on energy throughout the scenario.

Europe Dependent on Russian Oil, Gas

It is a fact that the bloc needs 40 percent of natural gas from Russia, despite warnings from experts advising against this dependence that was ignored, reported Nature.

The Nord Stream 2, a second pipeline that stretches across the Baltic Sea to Germany, was later sanctioned, but the EU is still getting energy despite embargoes.

When the gas field was opened up during the USSR era in 1960, it fueled the rebuilding of Europe and increased demand for natural gas and oil. Moscow knew the potential of a gas trade that Europe would find it hard to resist, cited the Conversation.

The constant relationship between the Kremlin and the EU in natural gas supply was stable by three factors. They are proven gas reserves and demand for it, but the infrastructure that links them both is crucial.

In the 1960s, the expansion of natural gas transportation and usage in Europe was formerly confined to small local networks.

Later, the Europeans invested in pipelines for the Russia-Europe gas trade going to Siberia, with western equipment and technical know-how, the Soviet Union's construction of the pipelines. Political sanctions will not easily end this dependence.

It took ten years for communist Russia to make the first gas deliveries that came to Austria way back then.

The second period during the 1970s saw more natural gas get delivered to clients in Europe. Natural gas was cheaper and cleaner than oil and coal, which were preferred.

Competition from Norway and Britain were undersea gas providers that used centralized systems that were more expensive. Low-cost energy provided by the USSR was preferred by most European countries like Germany and Italy.

Pipelines Encourages Monopolies

In the 70s, international cooperation was stable, and it took decades to build these spanning pipelines with one or two long-term contracts. This setup allows for the rise of the mutual dependence of provider and buyer.

Centralized pipelines encouraged market domination by monopolies in the '70s by the Soviets and European national or regional utilities. Natural gas became a relationship commodity subject to investments, personal contacts, and market shares.

Gas trade from 1968 until 1980 was stable until 1981 when the Soviets imposed martial law in Poland, seeking democracy. US President Ronald Reagan placed sanctions on pipeline technology; the US was not affected by the action, noted the Washington Post.

The Soviet Union engineered alternative compressor and pipe technology to pump gas because they could not reproduce it.

Gas Trade in the 1990s and 2020's

This was the third period since the Soviet Union fell in 1991 when Vladimir Putin was the leader in 2000 when Gazprom became state-owned.

He wielded natural gas as a geopolitical weapon against the EU before it attacked Ukraine, which the US used to weaken the hold of Russian energy in the bloc.

The Russia-Europe gas trade continues despite political sanctions, and the US needs to find a source better than Russian reserves.