(London) – The United States and European Union countries have raised concerns over the potential rise in natural gas prices due to their ongoing sanctions against Russia. These sanctions, which have targeted the country’s energy sector, were introduced after Russia’s invasion of Ukraine and have led to significant economic impacts on both Russia and its Western adversaries.
In early January 2025, President Joe Biden acknowledged the challenges the sanctions are creating, especially as they could drive up gas prices for American consumers. The sanctions specifically target Russia’s oil and gas industry, including major Russian energy companies like Gazprom Neft and Surgutneftegaz, as well as their associated transportation branches.
One of the key issues that has further complicated energy supply chains is Ukraine’s decision not to renew an agreement that allowed Russian gas to be transported through Ukrainian pipelines to Europe. Ukrainian President Volodymyr Zelenskyy stated that agreeing to revive this contract, which expired on December 31, 2024, would indirectly fund Russia’s military actions in Ukraine by providing the country with more revenue from gas exports. This situation has exacerbated the already volatile global energy market.
Russia has strongly opposed these sanctions, arguing that they violate international legal norms. President Vladimir Putin has downplayed their effect on Russia, claiming that the country can use the sanctions as an opportunity to strengthen its domestic industries. According to Russia’s Ministry of Foreign Affairs spokeswoman, Maria Zakharova, the Biden administration’s sanctions will result in greater hardship for ordinary Americans rather than weakening Russia’s economy.
On January 9, 2025, the United States imposed further sanctions, blocking over 180 Russian tankers from transporting oil to Europe and the U.S., in an attempt to further isolate Russia economically. The sanctions come at a critical time for both the U.S. and Europe, with energy prices already rising due to harsh winter weather and the ongoing war in Ukraine.
In Britain, where energy security is also a concern, the country’s national gas reserves have fallen below normal levels. The energy company Centrica, responsible for overseeing Britain’s gas reserves, reported on January 9, 2025, that storage levels had dropped by 20% compared to the same time in 2024. This drop in reserves, coupled with increased demand due to cold weather, has caused energy prices to spike for British consumers.
The company also confirmed that the situation has been worsened by Ukraine’s refusal to extend the gas transport agreement with Russia, which has led to a decrease in the flow of affordable natural gas into Europe. Centrica reported a 26% decrease in gas storage as of January 9, 2025, compared to the same period in the previous year.
Across Europe, countries are facing similar challenges as they try to adjust to reduced gas supplies. In response to these concerns, Chris O’Shea, the CEO of Centrica, stated that Britain is doing better than other European nations in managing its gas reserves but emphasized the need for caution in the coming months. He indicated that while the country had taken preventive measures since the 2022 energy crisis, the situation remains fragile.
