Across Europe, hundreds of sites are logging record-breaking warm winter temperatures. Ski slopes are closed during what is typically their busiest time of year due to a lack of snow. According to reports from Czech Television, some trees were even starting to flower in private gardens due to the false spring. Meanwhile, in Switzerland, the office of Meteorology and Climatology issued a pollen warning due to early blooming hazel plants. The historically warm winter has sounded alarm bells for fast action against climate change, but it’s also had a major silver lining: it’s all but eliminated any leverage Russia had over the European Union.
Russia and the European Union have been using energy imports and exports as weapons in a pyrrhic war of wills since Russia invaded Ukraine early last year. Until recently, the European Union imported almost half of its natural gas supply from Russia, making European energy demand a vital component of Russia’s economic well-being, while also rendering the EU dangerously vulnerable to the whims of Russian president Vladimir Putin’s volatile authoritarian regime. As a result of this delicate balance, the EU has tried to crack down on Russia’s war in Ukraine by imposing increasing rounds of energy sanctions on the Kremlin, while Russia has tried to prove that Europe is crying wolf by interrupting the flow of natural gas to the bloc. This has created an unprecedented energy crisis in Europe that is redrawing the rules of global geopolitics as we speak, but now with an unpredicted twist.
This winter was supposed to be rough. The gas wars between Russia and Europe were supposed to trigger outages, economic turmoil, governmental stress, and civil unrest. In the United Kingdom alone, projections had predicted that 26 million people would sink into energy poverty over the winter months – in other words, one in three households. And the UK would have been rather well off compared to many other more economically depressed European countries.
Instead, gas futures are now plummeting, demand is low, and Europe has managed to rebuild its inventories. As an added boon, the weather has also brought strong winds across Europe, reducing gas demand even more by boosting wind power production. All of this means that energy markets have had an unexpected opportunity to normalize, throwing a serious wrench into Russia’s wartime strategy.
Putin had counted on skyrocketing energy prices over the winter months to fund Russia’s costly war in Ukraine. That bet has not panned out, to say the least. Last month, Russia’s fossil fuel export revenues fell 17%, reaching their lowest level since before the war began. The EU’s most recent round of sanctions have also hit their target; since December Russia’s net energy export revenues declined €160 million ($172 million) a day.
“Europe’s Spring Weather Is Putin’s Winter of Discontent,” summed up a recent Washington Post headline. Putin “certainly had hoped to put Europe on the brink of either some countries begging for gas, and therefore destroying the unity in Europe, or really creating massive turmoil,” Georg Zachmann, a senior fellow at the Brussels-based think tank Bruegel told the Post. “That did not play out.”
While the warm temperatures are a worrying trend for the long term, they are unbelievably lucky for Europeans in the short term. Winter is not over, however, and experts warn that European leaders should not count their chickens before they’re hatched. A prolonged cold snap could tip the scales back toward disaster for the European Union. And even if the weather stays warm, the underlying issues that created the crisis to begin with have not changed. "While it will give governments more fiscal breathing room in the first part of this year, resolving Europe's energy problems will take concerted action over the course of several years," said a note by Eurointelligence. "Nobody should believe this is over yet."
However, a new study from the Centre for Research on Energy and Clean Air (CREA) found that continuing to ratchet up energy sanctions on Russia will be a winning strategy. “The short-term windfall generated to Russia by sky-high fossil fuel prices in 2022 is starting to wear out,” CREA reports. “Further cuts to Kremlin’s revenue will therefore materially weaken the country’s ability to continue its assault and help bring the war to an end.”
By Haley Zaremba for Oilprice.com
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