Mr Putin has vowed to retaliate against any sanctions “aggression” with equally damaging measures. Analysts doubt that he would risk cutting off gas to Germany or Italy but he might try to divide the EU Council by menacing minnows in Eastern Europe. Finland, Estonia, Latvia and Lithuania rely on Russia for 100pc of their gas.
Western strategists are looking at the use of “regasification ships” that can supply liquefied natural gas quickly to smaller countries that do not yet have their own LNG terminals.
Europe is less vulnerable to a gas boycott in the spring, and its gas stocks are higher than normal after a mild winter. Germany has 90 to 100 days supply. Eastern states could survive for several months. Poland’s new terminal will open this year, eventually meeting half its gas needs. Analyst expect a surge of global LNG supply this year.
The aim is to stiffen the resolve of small frontline states, making it easier to ratchet up the sanctions pressure one notch at a time.
Open Europe said full sanctions would have a “catastrophic impact on the Russian economy”, though the screw can be tightened in all kinds of ways short of an outright oil, gas and trade embargo. Europe’s exports to Russia are just 1pc of total GDP, while exports to Europe are 15pc. There is ultimately no symmetry.
Mr Riley said Mr Putin’s actions have already shattered Russia’s credibility as a reliable source of energy, and have guaranteed a rush to build up LNG, shale and other sources. “A lot of things are going to happen. We may even see the German nuclear ban lifted. It is a matter of national security now,” he said.
Here is Ambrose Pritchard-Evans article which contains two important graphs.Back to top