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Home Posts Natural Gas and the Tension in Ukraine

Natural Gas and the Tension in Ukraine
Oded Eran
16 February, 2022
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Since coming to power in 1999, the Russian president has said openly that the dissolution of the Soviet Union was a tragedy and the destruction of "historic Russia." Ukraine for Putin is the battlefield in which he seeks to stop the erosion of Russia's status as an actor in the international arena. Hence the ultimatum to the West backed by more than 100,000 troops on the borders of Ukraine: stop the expansion of NATO, the alliance established in 1949 in response to the Soviet bloc established by Russia at the end of World War II, and ensure that Kiev is not accepted as a member of the organization.

The first battle for Ukraine took place in 2014, and Putin won it when Russia took over the Crimean peninsula and annexed it without a significant military effort in the face of a weak response from Europe and the United States. In the current chapter of the struggle for Ukraine, Putin's bet is greater and so are the risks that come with it. Russia is completely dependent on oil and natural gas exports (more than a third of the GDP and almost two-thirds of exports). EU countries, led by Germany, are the main consumers. Until 2011 the main pipeline through which natural gas was transferred crossed Ukraine. Since then, the Nord Stream gas pipeline, which runs directly from Russia through the Baltic Sea to the coast of northern Germany, has been operating. In order to meet the European demand for energy, Nord Stream 2, in which has not yet begun to flow, was installed, and it has now become part of the campaign for Ukraine.
Gas pipelines that bypass Ukraine have cut Ukraine’s income by $2 billion per year. Russia is thus putting pressure on Ukraine and also causing disagreements between Germany – which has an interest in lowering the price of imported gas, as well as German companies participating in the Baltic Sea pipeline project – and the US, which has an interest in maintaining the regime in Ukraine and its stability in the face of Russia's attempts to undermine it.

In January 2022, however, the Biden administration opposed Republican Sen. Ted Cruz's initiative to pass sanctions against the companies involved in the establishment and operation of Nord Stream 2, primarily to maintain relations with Germany. Biden and the new German Chancellor Olaf Scholz, on the other hand, could not hide the gap in their approach to the issue when they faced journalists at the White House a week ago. "If Russia invades .....there will be no more Nord Stream 2. We will bring an end to it," Biden said. Scholz, on the other hand, chose not to answer the question, even though it was posed to him three times. Biden's remarks are an undisguised threat and part of a statement he repeated in his conversation with Putin (on February 12) that a Russian invasion of Ukraine would impose on Russia "immediate and painful costs."

The diplomatic effort will continue, although signs such as the removal of diplomats from embassies in Kiev and a ten-dollar increase in the price of an oil barrel in the past month do not bode well for success. Looking at the resolution of the crisis between the United States and the Soviet Union in 1962 around the attempt to place Russian missiles in Cuba, however, we learned that there are creative solutions that prevent conflict, and these are still possible in the current campaign.

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  • Research

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      • Israel and the Global Powers
      • Israel-United States Relations
      • Glazer Israel-China Policy Center
      • Russia
      • Europe
      • Iran and the Shi'ite Axis
      • Iran
      • The Israel–Iran War
      • Lebanon and Hezbollah
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      • Yemen and the Houthi Movement
      • Iraq and the Iraqi Shiite Militias
      • Conflict to Agreements
      • Israeli-Palestinian Relations
      • Hamas and the Gaza Strip
      • Peace Agreements and Normalization in the Middle East
      • Saudi Arabia and the Gulf States
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