diumenge, 16 desembre 2018

The UK ready to use energy as a political weapon against Russia

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The United Kingdom is planning to do precisely what it has been accusing Russia of doing over the past decade: use gas deliveries as a political weapon.

Monday 12 March, Theresa May issued an ultimatum to the Kremlin to provide the UK with a credible explanation on former double agent Sergei Skripal’s poisoning by Tuesday midnight. Failure to do so would trigger British retaliation with a full package of anti Russian measures.

Stop Russian gas deliveries

Moscow did not answer London’s summoning, a reaction that was interpreted as disdainful, sarcastic and contemptuous by Theresa May. During a House of Commons meeting, MP Stephen Crabb urged the Prime Minister to retaliate with boycotting Russian liquefied natural gas. He insisted that “Britain should not provide a market for Russian gas.” Theresa May confirmed to the Chamber that “in looking at [the UK’s] gas supplies [they were] indeed looking to other countries.”

In late December 2017, the UK received the very first LNG tanker from Yamal LNG plant operated by Novatek, a Russian private energy company. A second cargo was re-exported to the US and a third one landed at the Isle of Grain Tuesday 13 March.

Refusing Russian LNG deliveries might be difficult as uncommitted LNG goes where demand and prices are highest. Furthermore, importers do not control the origin of LNG since cargoes can contain LNG from several countries, as was the case of the Yamal LNG that was re-exported to the US on a French cargo.

Even though the UK does not depend on Russian gas supplies as much as other EU members, it still imports 44 percent of its gas consumption via pipelines from Europe, and over a third of Europe’s pipeline gas comes from Russia. When pumping from European pipelines, the UK has no control over the source of the gas.

The biggest diplomatic expulsion since the Cold War

Following the poisoning of former Russian spy Alexander Litvinenko, the UK expelled four Russian diplomats. This time Whitehall identified twenty-three Russian diplomats as undeclared intelligence officers and gave them a week to leave British soil. This sharp blow aims at “[degrading] Russian intelligence capability in the UK for years to come,” as stated by Theresa May.

Asset freeze

The Prime Minister announced that the UK will “freeze Russian State assets wherever [there is] evidence that they may be used to threaten the life or property of UK nationals or residents.” This could affect UK football where Russian magnates rule, according to BBC business editor Simon Jack.

Alicher Usmanov, the 7th wealthiest man in Russia and CEO of Gazprominvestholding – subsidiary of state-controlled Gazprom – from 2000 to 2014, owns a fourth of Arsenal football club. Roman Abramovich, the 10th richest man in Russia and former owner of Sibneft, now state-owned Gazpromneft, owns Chelsea football club. Both men are on very good terms with Putin. When in December 2014 the Russian President offered amnesty for repatriated capitals to protect the rouble which had lost half of its value against the dollar and curb the capital flight, Usmanov was the first to answer the call.

With Brexit looming, it does not seem the best timing to send the message that Russian money is not welcome in the United Kingdom.

This measure put forward by Theresa May could also have an impact on valuable assets owned by British companies. BP possesses a 19.75 percent stake in Rosneft. EU and US sanctions on Russia put BP in a tense situation. BP relies on its assets in Rosneft for a third of its global oil production and its CEO Bob Dudley sits on a board chaired by one of Putin’s most loyal allies Igor Sechin. How much more difficult can the British government afford to make it?

Suspension of high level bilateral contacts

May called for the suspension of all planned high level bilateral contacts between the UK and Russia. This means cancelling all invitations made to Russian officials including Foreign Minister Sergei Lavrov. Attendance of UK officials and the British royal family during the World Cup in Russia has also been called off.

The Prime Minister insisted that breaking off all dialogue with Russia is not in the UK’s national interest; however, she did not specify how she aims to keep an open dialogue with the Kremlin after implementing such radical measures.

On the Russian side

Undisturbed, Russia commented on the situation several days after May’s deadline expired. The President’s spokesman Dmitri Peskov stated that “Russia [had] repeatedly declared that it had nothing to do with this affair;” whilst the Ministry of Foreign Affairs’ spokeswoman Maria Zakharova qualified the way Great Britain is dealing with the Skripal affair as “a spectacle, a magic trick […] a global disgrace for the UK and its secret services, simply a colossal fiasco.”

Interruption of cultural and diplomatic relations

Three days after May announced the measures taken by the UK, the Russian Ministry of Foreign Affairs published a list of counter measures.

Russia has declared persona non grata and expelled 23 British diplomats. Like Russian diplomats expelled from the UK, these British citizens will have a week to leave Russian soil.

The Russian Federation cancelled its approval to open a British general consulate in Saint Petersburg and put an end to the British Council’s activities in Russia.

In its press release, the Ministry of Foreign Affairs also warned the UK that Russia reserves the right to implement other measures to respond to further UK “provocative actions.”

Ban on British media

Asked on Russia’s first national TV channel, Maria Zakharova declared that, should the state-financed TV channel Russia Today lose its UK operating license, “not a single British media outlet will work in Russia.”

What next?

Whilst May wants to show her government she can send a strong message to Russia, her freedom of manoeuvre is rather limited. As an EU member state, the UK is bound to the EU’s sanctions. As the UK enters Brexit negotiations, its influence at EU decision-making bodies is decreasing. The EU, which relies on Russian gas more than the UK, is already divided over existing sanctions, and Downing Street could find it difficult to convince its 27 partners.

Diane Pallardy studied an MA in Politics and International Relations at the University of Kent, and MA in World Politics and Fossil Energy at the Higher School of Economics, in Moscow.

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