Can Europe survive without Russian gas? Kremlin’s shut off threat and impact explained

Parts of Europe rely heavily on supplies of Russian natural gas and would struggle with a sudden shut off

Russia has threatened to stop sending gas to “unfriendly” countries – including all those in Europe – unless they pay in roubles.

Vladimir Putin’s demand has jolted energy markets and raised fears it could be a prelude to an interruption of supplies to Europe, which is heavily dependent on Russian natural gas and would struggle with a sudden cut-off.

Germany and some others have ruled out rouble payments, leading to the prospect of pipes being cut off.

Analysis from Brussels-based think tank, Bruegel, shows the impact and options for the countries in Europe. Here’s what you need to know.

Putin demanded that “unfriendly countries” which purchase Russian gas must pay in roubles. (Credit: Getty Images)

What is Russia threatening to do?

The Kremlin has threatened to stop sending gas to “unfriendly” countries, unless they pay in roubles - the Russian currency.

However, Russian officials have said it does not mean supplies will be immediately interrupted.

Gas used for heating and electricity was still flowing from Russia to Europe on Friday.

“Payments on shipments in progress right now must be made not this very day, but somewhere in late April, or even early May,” Kremlin spokesman Dmitry Peskov said.

On Thursday 31 March, Putin signed a decree which stated that certain nations must start paying for gas in roubles from April onwards.

It also stated they must use a rouble account at Gazprombank, this includes all those in Europe, including the United Kingdom.

It gave Russian authorities and the bank 10 days to make arrangements.

Some experts say it could be an effort to prop up the rouble, which fell in value amid sanctions but has since bounced back, though the effect on the currency would be limited.

What could happen if Russia ‘shuts off gas’ to Europe?

The UK only gets a small amount of its gas from Russia, with the majority coming from UK oil fields and Norway.

However, prices in the UK will still rise because British energy suppliers will have to compete with other European companies to buy UK gas.

Currently, households are protected from the volatility of the market by Ofgem’s price cap – despite the massive rise, which came into force on Friday 1 April.

However, if the Kremlin ends its gas flow to Europe then the price cap could be hiked by another 90% in October - an early analysis from US bank Goldman Sachs suggested.

Last month it was announced the UK would phase out Russian gas imports by 2023.

Bruegel said: “Until the summer, the EU would likely be able to survive large-scale disruption to Russian gas supplies, based on a combination of increased LNG imports and demand-side measures such as industrial gas curtailments.

“But, should a halt of Russian gas be prolonged into the next winters, it would be more difficult for the EU to cope.”

The UK has announced it will phase out the importing of Russian oil and gas by the end of the year, in a move that could place a greater dependency on North Sea oil

Which countries would be least and worst hit by the strangling of Russian gas supplies?

The further east of Europe a country is, the more they rely on Russian gas - Germany and Italy would be seriously hit.

Spain and Portugal would be less impacted by this as ports on the Iberian Peninsula are able to import 40 terawatt hours (TWh) of liquid natural gas from ships every month.

However, the peninsula only consumes 30 TWh a month - so could they help other European countries?

Getting excess gas to the rest of Europe is complicated as the pipes that connect the area to the continent are only able to carry five TWh of gas a month.

Meanwhile, getting gas from France to other countries is also complicated, as the gas is treated differently to give it an unusual smell that helps people detect gas leaks.

Also, some countries may have more gas stored than others but may just refuse to export it to their neighbours.

Could Europe get gas from elsewhere?

The EU’s pipelines with Norway could bring 200 TWh more than they did last year, while North Africa and Azerbaijan could supply an extra 450 TWh between them.

Together, these options could be enough to replace the 1,700 TWh that Russia supplied in 2021.

The UK also has space in its pipelines to send another 400 TWh to the EU.

However, this does not mean that the supply is there - the gas will need to be pumped out of the ground in the US, the Middle East and elsewhere, and loaded onto a limited number of ships.

Sellers will then need to choose Europe as their destination above Asia and the Americas.

What could Europe do to reduce the amount of gas it needs?

Firstly, around 900 TWh of gas was burned to produce electricity last year - and some of this could be replaced by oil.

Secondly, if there’s  good weather in Europe, that might turbocharge wind and solar farms.

Governments may also have to step in to tell people to turn down their thermostats.

Finally, steel, aluminium and silicon producers could choose to close or slow their production.

What has the reaction been to the gas shut off threat?

The European Commission’s energy chief, Ditte Juul Jorgensen, tweeted on Friday that the European Union was co-ordinating “to establish a common approach”.

German officials said contracts stipulate payment for gas in euros and dollars and that must continue.

“The German government is currently examining this decree to determine its concrete effects,” spokesman Wolfgang Buechner said on Friday.

Officials would not be drawn further on what impact the Russian demands might have. Economy Ministry spokeswoman Beate Baron noted that Gazprombank has been given 10 days to explain the procedure, “and of course we will in turn look carefully at that”.