After Russia cut supplies to Ukraine in 2006, the EU decided it needed to reduce its dependence on Russian gas. But since then, a series of shrewd moves by Gazprom, the Russian state-owned gas monopoly, has left the EU's diversification strategy in tattersby Derek Brower / July 28, 2007 / Leave a comment
Published in July 2007 issue of Prospect Magazine
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In the global contest for control over oil and gas distribution over the last 18 months, one side has offered the world a masterclass in strategic planning and execution. Gazprom, the Russian natural gas monopoly that controls over a third of the world’s reserves, has run rings around its main rivals: the natural gas consumers of the EU.
This is a problem for the EU and one of its main foreign policy goals: diversifying energy supply away from Russia and putting relations between Moscow and Brussels on a more even keel. Moreover, Russia’s domination of EU energy supply coincides with a reassertion of Moscow’s influence on issues from nuclear missiles to the middle east.
The two sides in this conflict, Gazprom and Brussels, first became enemies in January 2006, when Russia briefly interrupted gas supplies to Ukraine. Western governments and commentators said Moscow had ordered gas supplies to Ukraine to be stopped as punishment for Kiev’s orange revolution. Gazprom was unfairly demanding its poor neighbour pay twice as much as it had previously done for gas: a naked attempt to wreck Ukraine’s embrace of democracy and keep the country inside Russia’s zone of influence.