What Will Happen To Europe’S Economy If Putin Shuts Off The Gas Taps

Europe receives from Russia about a third of Europe’s oil reserves and more than 40% of natural gas. The euro area produces about a quarter of its energy from natural gas, while Russia accounts for about a third of block imports. While the United States consumes very little Russian oil—oil imports from those countries were only 90,000 barrels a day in December—it is still an interconnected and global market.

Mike Sommers, CEO of the American Petroleum Institute’s oil and gas trading group, does not lose sight of the risk that Russia is holding back oil supplies. Natasha Kaneva believes that investors underestimate the risk of Vladimir Putin using oil supplies as a weapon. Fears are growing that Putin might retaliate by using not only natural gas but crude oil as a weapon against the West.

Vladimir Putin doesn’t need to completely turn off the tap to punish the West. The United States and Europe can and should expect Putin to continue to use every tool at his disposal to attack democracies and progress around the world, as he has done in Putin’s Kremlin for nearly two decades. The United States must now assume that the Kremlin will use the most dangerous tactics that have been used successfully around Russia and the rest of Europe, in the United States. However, as this report will show, Putin’s campaign of hostile influence over the Kremlin may be thwarted.

Russia faces the specter of a full-blown financial meltdown. Punishing sanctions leveled by the West have sent the ruble crashing to record lows, shuttered Moscow’s stock market, and made Russian assets toxic on the world stage.

The White House has even taken aim at Vladimir Putin’s financial fortress, removing access to at least a chunk of Russia’s $630 billion rainy-day funds that was designed to cushion the economic blow of this very crisis.

Now comes the big question: How will Putin — who is also facing sanctions on his personal wealth from the West — fire back in what is rapidly morphing into economic warfare? There is growing concern that Putin could retaliate by using not just natural gas but also crude oil as a weapon against the West.

Spain is a European leader in fighting Russia-based organized crime groups that use the country as a hub for money laundering and other criminal activity. Some have questioned whether companies should take a stance on Russia given the conflict elsewhere in the world. There are also concerns that if brands operate in Russia, they may be asked to do the same in China, where they operate more. For Russians, the risk of shortages has prompted the government to temporarily ban the re-export of foreign medicines and say it will limit trade in certain goods and raw materials.

A shrinking number of well-known companies are still doing business in Russia, even as hundreds have announced plans to curtail ties.

Burger King restaurants are open, Eli Lilly is supplying drugs, and PepsiCo is selling milk and baby food, but no more soda.

The pace of businesses exiting Russia accelerated over the past week as the deadly violence and humanitarian crisis in Ukraine worsened, and as Western governments ratcheted up economic sanctions to punish Russia for its two-week-old invasion. Major oil companies BP and Shell walked away from multibillion-dollar investments. McDonald’s and Starbucks stopped serving customers.

The companies that still have a presence in Russia say they have franchise owners or employees to consider; they don’t want to punish Russians by taking away food or medicine, or they provide software or financial services for Western businesses that aren’t easy to replace. ‘By The Associated Press

It is not enough to sell Russia’s need for foreign intervention only to domestic audiences and to delegitimize or silence Russian voices rising in opposition. This narrative repeatedly touches on central themes such as encirclement, conspiracy, and infighting and portrays the United States, NATO, and Europe as plotters to surround Putin’s Kremlin and force it into submission to the West.

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