J. Henderson

Does Russia Have a Potent Gas Weapon

Russian exports of gas to Europe and countries of the former Soviet Union provide the Kremlin with a useful political lever, and amid the current crisis in Ukraine many in the European Union (EU) would describe this lever as a potential weapon. However, James Henderson argues that any threat is based on commercial and contractual issues, which consuming countries can respond to in kind by diversifying their sources of supply and increasing competition in their markets. As the gas market is becoming increasingly global in nature so dependence on Russian gas can and is being reduced, undermining the potency of any theoretical weapon. Evidence suggests that EU strategy is already working, and Gazprom is being forced to compete in markets where it previously dominated.