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21st May 2022

Russia threatens Europe with higher energy prices

  • EU imports 30 percent of its gas from Russia (Photo: jiva)

Russia on Wednesday (30 July) reacted angrily to the EU economic sanctions, threatening to increase energy prices.

“Obsessed with sanctions, Brussels is itself creating barriers for further cooperation in such a key sector as energy industry,” the Russian foreign ministry said in statement.

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“It is a senseless and irresponsible step, which will inevitably cause European energy market prices to rise,” the statement said.

The ministry added that the economies of Russia and the EU are interlinked and that the "stage three" sanctions will affect the economic situation in the EU "not less than in Russia".

Some 30 percent of the overall EU gas consumption is covered by Russian gas imports, but some eastern member states are up to 90 percent dependent on Russia.

The possible retaliation in the energy sector was factored in when the EU decided to adopt economic sanctions, which will enter into force Friday.

As for the arms embargo also due to enter into force Friday, Russia said it was "perplexed" since it "does not take part in the military conflict in Ukraine."

Moscow also accused the EU of being influenced too much by the US: “It’s a shame that after having long searched for its own ‘single voice,’ the EU now speaks Washington’s voice.”

The US has released intelligence showing that Russia continues to arm the pro-Moscow separatists in Ukraine and said it believed YouTube audiotapes of rebels talking about shooting down a passenger plane were authentic.

The Russian foreign ministry however said current EU foreign policy is not based on facts, but defined by Washington who is “watching questionable YouTube videos”.

“Of course, we will take into consideration the current non-constructive and non-independent behaviour of the EU when building our relations,” it concluded.

The statement comes after the EU late Wednesday published eight new names, including three of President Vladimir Putin's closest oligarch friends, to a travel ban and asset freeze list.

The EU also blacklisted Almaz-Antey, the arms manufacturer which produced the missiles believed responsible for the downing of the Malyasia Airlines MH17 flight, in which almost 300 people, mostly EU citizens, were killed.

Later on Thursday, the EU official journal is expected to publish the list of Russian state-owned banks which will be cut off from EU financial markets.

“It’s very unfortunate. It’s not a good day for Russia. I’m concerned [the Russian government] will do something back and start nationalising things like Exxon in Sakhalin," a senior executive at one of the targeted banks told Reuters.

So far, the only EU producers hit by a Russian import ban are Polish apple growers, who sell more than half of their exports to Russia. Moscow claims the ban is for sanitary reasons and is not linked to the economic sanctions, but it added that it will look into other EU producers as well, with Dutch farmers also expected to be hit.

Meanwhile, at the crash site in eastern Ukraine, international investigators were still denied access as heavy fighting was ongoing between government forces and rebels.

Kiev accused the pro-Russian rebels on Wednesday planting land mines on the way to the crash site in order to prevent access to the site.

"They have brought a large number of heavy artillery there and mined approaches to this area. This makes impossible the work of international experts trying to start work to establish the reasons behind the Boeing 777 crash," said Ukrainian military spokesman Andriy Lysenko, as quoted by Reuters.

The leaders of the seven most industrialised nations (G7) on Wednesday called on all sides to establish a ceasefire and grant access to the crash site.

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