Secret energy deal might change how Europe gets its gas next month
A complex gas-swap arrangement between Russia and Azerbaijan could reshape Europes energy landscape. The deal would let European nations buy Russian gas through a middle-man while avoiding direct business with Moscow
In a game-changing development‚ a new gas-swap plan could let Russian energy flow into Europe through an unexpected back-door. The scheme which starts after next month involves Socar (Azerbaijans state energy firm) acting as a middle-man to re-label Russian gas as Azerbaijani
A current gas-transit deal between Moscow and Kyiv brings about $800m yearly to Ukraine but its ending soon. The proposed arrangement would help Europeans avoid dealing with Russians directly: however it raises some hard questions about war-funding
These attacks were paid for largely by Russian exports of fossil fuels some of which were sent to European countries
The timing is especially tough - this weekend Russia hit Ukraine with over 200 missiles and drones killing at least 10 people. President Volodymyr Zelensky confirmed talks with Baku about various options but no clear solution is in sight
The situation highlights several key issues:
- Europe still gets 17% of its gas from Russia
- Azerbaijan has gas reserves but lacks proper infrastructure
- The current Ukraine-Russia deal ends in Dec-2024
- Europe might need Russian gas until 2027
Thierry Bros from Sciences Po Paris points out that Europe hasnt found good alternatives yet. “You cant just jump on TV and say Russian gas is bad without finding an alternative; weve delayed our response and sleep-walked into a crisis“ he notes. While the UK banned Russian energy Europe still hasnʼt taken that step - leaving the door open for more complex deals like this one
