On the verge of collapse?

With Russia's long-anticipated move of cutting off gas supplies to Europe, threat of a tough winter looms large over the continent. Citing an "impossible to repair" defect in the last working turbine of the Nord Stream gas pipeline — due to Western sanctions — Russia's Gazprom halted the supply to Europe. This disruption will have a huge economic repercussion for Russia and Europe, with Germany being the worst sufferer. Though Putin denies it, Europe — which was already bracing for the ban — is convinced that gas supply is being used as a weapon against it. At the same time, Ursula von der Leyen, European Commission President, proposed to impose a price cap on Russia's oil and gas exports for cutting "Russia's revenues which Vladimir Putin uses to finance this atrocious war in Ukraine." Her statement has elicited strong response from Putin who, in most clear terms, warned that Russia will stop supplying energy if price caps are imposed. If tensions between the EU and Russia continue to escalate, it will spell doom for Russian gas trade in the continent. Ever since the war broke out in Ukraine, the West and Russia have been weaponizing global trade items that concern basic lives of citizens — irrespective of their nationality. There is no doubt that Vladmir Putin's actions in Ukraine have been monstrous but his weaponization of energy and trade is only a counter-response to the West's most dearly held tactic. The arrogant Putin appears to be bringing down the arrogance of the West that allows it to impose sanctions globally — justifiably or unjustifiably. Amid this tug of war, the real sufferers have been the people. Putin has warned that Europe would be "frozen" like a wolf's tail in a famous Russian fairy tale. The halt in gas supplies will affect European countries in two ways — directly, as they may face blackouts during winters; and indirectly, as a variety of crucial industries will be forced to either curtail their production or shift their production bases. If supplies remain affected for longer durations, the plight of Europeans may be prolonged, taking even years. It may be pertinent to note here that Europe's energy sector is already inflicted by historic heatwaves and drought. The criticality of gas trade is understood by both Russia and Europe. When Europe started imposing sanctions on Russia, it was careful enough to exclude the Russian gas. Similarly, as Russia announces to cut off the gas supply from Nord Stream Pipeline, it has a fabricated reason to float. Russia simply appears to be playing pressure politics. It wants to create a rift among European nations; Putin suggesting Germany to reopen the newly constructed Nord Stream 2 pipeline — which is sanctioned by Europe — substantiates this argument. Putin might, however, be making a mistake by taking Europe granted as a gas consumer bloc. The European Union has already started investing heavily in much cheaper renewable energy sources. Over the coming years, renewable infrastructures will be stabilized across the continent. In the meantime, for meeting immediate needs in the coming winter, Europe is left with no option than to sign long-term agreements with alternative suppliers like Qatar and the United States — albeit at higher rates. With disruptions and difficulties, Europe can still tide across the tough times — eventually shedding its dependence on Russia. Even if supplies are restored after the crisis, Europe may not prefer to re-initiate gas trade with Russia. Russia may be at risk of losing the huge European gas market but, during the Russia-Ukraine war, it has also found out that it can partly compensate for the losses by exporting tanker oil eastwards. In the meantime, it also has an opportunity to expand gas pipelines to the East. So, is the long relationship of gas trade between Russia and Europe on the verge of collapse? It may be too early to predict but, going forward, that may no more be an improbable outcome. As Germany and other European countries are revisiting coal, petroleum and nuclear energy, the climate is also likely to suffer for sure. A stable and sustainable solution has to be found by the earliest.