Russia and the West stay at odds regarding overpayment for natural gas exports. Europe, in particular, is heavily dependent, with Moscow insisting “unfriendly” countries pay for gas deliveries in Russian rubles, a demand G-7 nations have overlooked.
The departure arrives in the wake of an unprecedented and coordinated barrage of international sanctions versus Russia for its invasion of Ukraine.
The U.S. has announced a complete ban on Russian oil, gas, and coal imports, while the U.K. intends to phase out Russian oil by the end of the year, and the EU strives to cut its reliance on Russian imports by two-thirds.
Russia accounts for about 40% of the EU’s natural gas exports, with Germany and Italy especially exposed. On Wednesday, Germany issued an “early warning” that natural gas rationing could be needed if a complete supply shortage ensues.
Developing new LNG supply partnerships
The EU has hit a deal with the U.S. for an additional 15 billion cubic meters of LNG. Nevertheless, former U.S. Energy Secretary Dan Brouillette expressed Monday that this would not be enough to fill the Russian shortfall.
Italian Foreign Minister Luigi di Maio informed CNBC on Tuesday that over the past month, he had traveled to countries like Mozambique, the Republic of Congo, and Angola in a bid to develop new LNG supply partnerships.
According to Di Maio, energy security is essential for countries that are global manufacturing powers like Italy and many others, and they must be capable of diversifying their energy sourcing.
They are diversifying away from their dependence on Russia to bypass any eventual threats from Russia on our gas supply and to resume a green transition with new and different energy sources.