Ukraine’s Naftogaz CEO accuses Russia of using gas as a geopolitical weapon as energy crisis deepens

3 weeks ago
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Naftogaz CEO Yuriy Vitrenko.

Anatolii Siryk | Ukrinform | Barcroft Media | Getty Images

LONDON — The main enforcement of Ukrainian authorities vigor elephantine Naftogaz has accused Russia's Gazprom of utilizing earthy state arsenic a geopolitical weapon, calling connected the U.S. and Germany to instrumentality enactment against Moscow portion it awaits regulatory support for a arguable pipeline project.

It comes soon aft the International Energy Agency, the world's vigor watchdog, intervened to telephone connected Russia to nonstop much state to Europe to alleviate the region's deepening proviso crunch.

The IEA's statement connected Tuesday was seen arsenic a uncommon rebuke of the Kremlin and lent further enactment to the presumption that Moscow has played a relation successful Europe's vigor crisis — alongside marketplace drivers specified arsenic highly beardown commodity prices and debased upwind output.

European households look a steep leap successful vigor bills, with nerves increasing up of winter arsenic powerfulness and state prices soar.

Record prices that truly wounded the system of Ukraine [and] not conscionable Ukraine, the full portion basically. If it is not an economical war, what is that?"

Yuriy Vitrenko

CEO of Naftogaz

Speaking to CNBC via video call, Naftogaz CEO Yuriy Vitrenko said Russia's state-owned vigor elephantine Gazprom was manipulating the region's vigor situation to effort to fortify the lawsuit for starting flows via Nord Stream 2.

Gazprom did not respond to a CNBC petition for comment.

The pipeline is designed to present Russian state straight to Germany via the Baltic Sea, bypassing Ukraine and Poland.

Critics argue the pipeline is not compatible with European clime goals, deepens the region's dependence connected Russian vigor exports and volition astir apt fortify Russian President Vladimir Putin's economical and governmental power implicit the region.

The operation of Nord Stream 2 was completed earlier this month. Germany's vigor regulator has since said it present has 4 months to implicit certification of the task aft receiving each indispensable paperwork for an operating license.

A installation adjacent the starting constituent of the Nord Stream 2 offshore earthy state pipeline.

Peter Kovalev | TASS | Getty Images

Naftogaz's Vitrenko said Gazprom was deliberately withholding state supplies to Europe, blocking entree to the state transmission strategy of Ukraine from different Russian companies and blocking exports from Central Asia that could spell to Ukraine via Russia.

"This is simply a precise wide motion that they are utilizing state arsenic a geopolitical limb astatine the moment," Vitrenko said.

Kyiv's relations with Russia plummeted successful 2014 aft Moscow annexed the Crimea peninsula from Ukraine and supported pro-Russian separatists successful Ukraine's eastbound Donbass region. Ukraine says the seven-year struggle has killed much than 14,000 people.

Germany's informing to Russia

Benchmark European state prices person skyrocketed much than 250% since January, portion benchmark powerfulness contracts successful France and Germany person some doubled.

EU vigor ministers held meetings successful Slovenia this week to sermon the bloc's vigor policy.

Outgoing German Chancellor Angela Merkel sought to easiness long-running concerns astir the Nord Stream 2 pipeline during her last sojourn to Kyiv earlier leaving office.

Speaking past period alongside Ukraine President Volodymyr Zelensky, Merkel said sanctions whitethorn beryllium imposed against Moscow if state was being utilized "as a weapon."

Analysts person questioned however Germany oregon Europe would find that to beryllium the case.

German Chancellor Angela Merkel gives a associated quality league with Ukrainian President pursuing their talks astatine the Mariinsky palace successful Kiev, connected August 22, 2021.

SERGEY DOLZHENKO | AFP | Getty Images

When asked whether Naftogaz had religion Germany would instrumentality due enactment if Russia's Gazprom was deemed to beryllium utilizing state arsenic a geopolitical weapon, Vitrenko replied: "We already spot that Gazprom is utilizing state arsenic a geopolitical weapon. So, it is not astir the future, but we are telling them that Gazprom has been utilizing state arsenic a geopolitical limb for years."

"It is happening astatine the infinitesimal … Record prices that truly wounded the system of Ukraine [and] not conscionable Ukraine, the full portion basically. If it is not an economical war, what is that?"

Germany's ministry for economical affairs and vigor declined to remark erstwhile contacted by CNBC.

U.S. Senate sheet to sermon Nord Stream 2

Naftogaz's main enforcement said helium expects President Joe Biden's medication to instantly reconsider its determination to waive sanctions connected Nord Stream 2 AG, the Gazprom-owned, Swiss-registered institution moving connected the Nord Stream 2 pipeline.

A further hold to assistance the waiver would marque specified a determination "more and much difficult," Vitrenko said.

Biden's medication concluded successful May that Nord Stream 2 AG and its CEO engaged successful behaviour that warranted sanctions. However, Biden waived the sanctions to let clip to enactment retired a woody and proceed gathering ties with Germany.

The U.S. Senate Foreign Relations Committee is expected to sermon the substance astatine a closed-door proceeding adjacent week. It comes amid intensifying unit from immoderate Congress members to driblet the waiver and enforce sanctions.

"First, you amusement you are compliant and lone past you are allowed fundamentally to operate. That's however it works," Vitrenko said.

"We expect the U.S. authorities volition reconsider their determination and region this waiver and volition enforce sanctions connected Nord Stream 2. And past … erstwhile they spot Gazprom has stopped utilizing state arsenic a geopolitical weapon, erstwhile they spot that Gazprom and its subsidiary alteration thing truthful that they are present compliant with European rules, past these sanctions volition beryllium removed. That's the logical approach."

"When somebody's successful breach, somebody's utilizing state arsenic a geopolitical weapon, you authorisation this somebody. And erstwhile they behave, you region these sanctions," Vitrenko said.