EU Braces for Possible Russian Retaliation on Gas

(Bloomberg) -- The European Union is preparing for any disruptions of natural gas supplies from Russia as it weighs the risk Moscow could halt shipments in retaliation for sanctions.

EU energy ministers discussed on Monday various supply-shock scenarios following Russia's invasion of Ukraine. The emergency gathering took place days after a decision by Western governments to impose penalties on Russia's central bank and to exclude some of the country's banks from the SWIFT financial system.

“Following the measures taken by the EU and the international community to sanction Russia, we can't exclude that Russia will take retaliatory steps that will impact the energy trade,” EU Energy Commissioner Kadri Simson told reporters on Monday after the meeting.

Moscow has given no indication it intends to cut off the gas, and flows have even increased since the invasion.

Europe relies on Russia for about a third of its gas. But Simson said in any scenario, the EU can “get through this winter safely,” even as “risks remain.”

The Russian attack on Ukraine has highlighted the EU's dependence on the country's natural gas, forcing a re-think of national energy policies across the bloc. Ukraine is a transit route for about a third Europe's supplies of Russian gas.

The European Commission, the bloc's executive arm, is due to produce a strategy next week aimed at cutting reliance on the biggest single supplier of the fuel. Germany has already re-tooled its energy policy in the wake of the invasion, and European ministers have lined up this week to call for an acceleration of projects that can reduce reliance on Russian fossil fuels.

“This war will have deep repercussions one way or another on our own energy system,” Simson said.

Read: EU Could Survive Without Russian Gas Next Winter, Study Says