U.S. Says If Russia Exploits Europe Gas Crisis 'It Will Backfire on Them'

The U.S. has warned Russia not to exploit a growing energy crisis in Europe, after reduced supply drove gas prices up.

Several energy firms have collapsed in Britain, where wholesale gas prices hit a record high, rising by 37 percent in 24 hours on Wednesday. Meanwhile, across the continent the price surge has halted factories.

President Vladimir Putin seemed to calm the market by announcing Russia would boost supplies to Europe. Putin said Russia is fulfilling its contractual obligations on supply, but critics say it has resisted delivering more to avoid keeping pace with rising demand—and that it intends to use energy as leverage going into Europe's winter months.

One analyst told Newsweek the Kremlin appeared to have decided "now is the time to push its geopolitical advantage."

During a visit to Brussels where he met European Commission President Ursula von der Leyen and other EU officials, U.S. National Security Adviser Jake Sullivan said Moscow "has a history of using energy as a tool of coercion, as a political weapon."

He told reporters on Thursday: "Whether that's what's happening here now is something I will leave to others."

In an interview with the BBC on Thursday, Sullivan said it would be a "mistake" for Russia to try to use Europe's reliance on Russian gas as geopolitical leverage.

"We have seen it happen before and we could see it happen again," he said.

"I think that would ultimately backfire on them, and I believe they should respond to the market demands for increased energy supplies to Europe," Sullivan said, without specifying what the consequences would be.

Russia has been accused of deliberately withholding extra natural gas from the market to pressure Berlin and the EU to certify Nord Stream 2, the pipeline that will take gas from Russia to Germany.

Kyiv has long expressed its concerns that the new pipeline bypassing Ukraine would mean it would miss out on transit revenues. The U.S. was among countries that voiced fears it handed Moscow a strategic advantage.

Timothy Ash, emerging markets senior sovereign strategist at Bluebay Asset Management, said Russia was currently exploiting the gas market "to seize political advantage because it wants Nord Stream 2 certified to undermine Ukraine."

Ash told Newsweek: "Russia has realized with carbon transition, its goose is cooked. It has decided that now is the time to push its geopolitical advantage because it's winter. If it is going to use the gas card, probably it is the last year to do it."

Sullivan said that the larger challenge is "global" and includes "both oil supplies and gas supplies," which were essential to the international economic recovery after COVID.

"It is a challenge where the supply of these sources of energy are not meeting the growing demand as economies recover," he told the BBC.

Russian President Vladimir Putin
President Vladimir Putin speaks with Russia's local authorities during a video link meeting on October 4, 2021. Gas prices were impacted after he announced Russia would increase supply to Europe. Evgeny Paulin/Getty