Bristling under economic sanctions imposed by the West, Russia fires back（在线收听）

Bristling under economic sanctions imposed by the West, Russia fires back

Transcript

Russia is cutting off natural gas supplies to Poland and Bulgaria, and has demanded countries pay for energy in rubles. The move is seen as a warning by Russia to bigger European energy consumers.

A MARTINEZ, HOST:

Russian President Vladimir Putin is threatening the West with lightning-fast retaliatory strikes. He wants the U.S. to stop sending military support to Ukraine, and he's telling lawmakers in Moscow that actions like that pose a strategic threat to Russia. European leaders say Russia is already trying to blackmail them by cutting off natural gas supplies to Poland and Bulgaria. While the move affects two relatively small countries, it comes with a warning for the wider European Union. But could it backfire? Let's start our coverage this hour with NPR's Jackie Northam.

JACKIE NORTHAM, BYLINE: Like many European nations, Poland and Bulgaria rely on Russian natural gas to heat their homes and run their businesses. But they were not willing to bend to Moscow's demand by paying for the gas in rubles instead of the usual dollars and euros. They're not Russia's biggest customers, so it was an easier move for Moscow to make.

JAMES WADDELL: These are the low-hanging fruit because these contracts are due to expire anyway.

NORTHAM: Even so, Moscow is sending a clear signal to bigger European nations, says James Waddell, the head of European gas at the London-based analysis group Energy Aspects.

WADDELL: It does show that Russia is willing to halt supplies if people don't subscribe to the new payment system. It is a warning shot for other, bigger buyers in Western Europe that, you know, they are willing to carry out their threat.

NORTHAM: But it's more than paying for gas with rubles, which would undermine sanctions the West has put on Russia's banks. Moscow is also retaliating against European nations for those sanctions and for supporting Ukraine. Jason Bordoff, director of Columbia University's Center on Global Energy Policy, says Russia is taking a risk.

JASON BORDOFF: I think using gas as a weapon, using energy as a weapon is shortsighted, self-defeating and shooting yourself in the foot from Russia's standpoint. It's why Russia, for the most part, has not used energy that way before, even at the height of the Cold War or the height of conflict between Europe and Russia.

NORTHAM: Poland had already started to wean itself off Russian gas. It and Germany have enough stored up to last a few months. But Bordoff says Moscow knows how powerful the eventual impact in Europe will be if natural gas supplies from Russia are shut off.

BORDOFF: If Russia were to really cut gas supplies to much of Europe, particularly Germany, it would cause severe economic pain. You're talking about potential recession. It's simply too difficult in the near term to find enough alternative gas supplies to fill that gap. So I think you'd be talking about potentially rationing of energy and sky-high natural gas and energy prices way beyond anything we've seen to date.

NORTHAM: But this could backfire for Russia in the long run. Its energy companies have built a reputation over the years for delivering oil and gas despite political tensions, says William Courtney, a former U.S. ambassador to Kazakhstan and Georgia, currently with the nonpartisan RAND Corporation.

WILLIAM COURTNEY: Cutting off gas increases perceptions in Europe that Russia is an unreliable supplier. Gazprom and Rosneft, Lukoil, Novatek - they must all be fit to be tied by what's happening.

NORTHAM: Waddell with Energy Aspects says if Russia cuts off Europe, its most lucrative customers, it will need to go looking for other buyers, most likely in Asia. But he says Russia won't have much leverage after it's weaponized its energy.

WADDELL: If they're trying to sell most of that gas into China, I would expect the Chinese to want to have control over some of the gas fields in Russia and the export infrastructure to ensure that they are never cut off from Russian supply.

NORTHAM: In the meantime, it's a question of whether Moscow is willing to jeopardize its energy business and whether Europe will backtrack on sanctions and start paying in rubles.

Jackie Northam, NPR News.