Viktor Orban ally slams EU oil embargo on Russia
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For months now, Russian President Vladimir Putin has weaponised his monopoly on European energy supplies by threatening to shut off gas supplies to countries that cross him. Months prior to the invasion of Ukraine, Putin squeezed gas supplies flowing to the EU to a contractual minimum, in a bid to boost the certification of the Nord Stream 2, which would further make the fuel-starved continent reliant on Russia.
After the invasion, Putin retaliated against Western sanctions by ordering European countries to pay for gas in rubles, in a bid to boost Russia’s economy.
Now, the Kremlin has made good on its threats by cutting off energy supplies to Shell in Germany as well as to Ørsted in Denmark.
Last month, Russian state-backed gas behemoth Gazprom cut supplies to Netherlands, Poland, Bulgaria and Finland after they refused to bow down to Putin’s demand to pay in rubles.
Shell, which is a major British company, is both a major producer of fossil fuels and a trader that purchases gas from companies such as Gazprom to sell it on.
After the invasion of Ukraine, Shell announced that it would gradually phase out Russian gas from its supply, but this latest move by Russia means that the British energy firm has been completely phased out.
Responding to Gazprom’s statement, Shell said on Tuesday: “Shell has not agreed to new payment terms set out by Gazprom.
“We will work to continue supplying our customers in Europe through our diverse portfolio of gas supply.
“Shell continues to work on a phased withdrawal from Russian hydrocarbons, in compliance with applicable laws and regulations.”
Gazprom has ended the contract with Shell, which supplies a maximum of 1.2 billion cubic metres (bcm) of gas per year, which would be delivered to the company’s trading wing in Germany.
Putin’s gambit to boost the ruble has largely paid off, with many countries and companies, including Germany, agreeing to Russia’s terms.
While the UK only imports about four percent of its gas from Russia, there are fears that Russia cutting off European supplies would have knock-on effects, either in the form of energy being diverted to the EU, or sending gas prices higher.
This comes as reports suggest that ministers have reportedly drawn up plans that could result in six million households facing “rationing” of electricity.
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As the UK vowed to end the imports of Russian oil by the end of the year, the Government is ready to bolster its electricity supply by extending the life of coal and ageing nuclear power stations.
According to some reports Government modelling of a “reasonable” worst-case scenario predicts significant gas shortages in winter if Vladimir Putin decides to cut off more supplies to the EU.
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