Caribbean News
EU Members agree to Cut Gas, 15% amidst Russian-Ukraine crisis
By Dana Malcolm
Staff Writer
August 5, 2022 – The European Union has instructed its members to cut use of Russian gas as the Kremlin will likely cut their supply in the coming months.
The EU describes the situation as Russia ‘weaponizing’ gas. Russia and the west have traded economic blows since the invasion of Ukraine in February.
The EU members have unanimously agreed to the cut on paper but several countries put up a fight leading to exemptions in some areas. Russia has been hit with economic sanctions and has retaliated against them by slowing its oil and gas exports to the EU. The EU depends heavily on Russian oil and gas for electricity heat and fuel
“Almost half of our Member States are already affected by reduced deliveries, taking action now can reduce both the risk and the costs for Europe in case of further or full disruption, strengthening European energy resilience.” The EU said
Countries that are not interconnected to other members’ gas networks will be exempt from the 15 percent mandatory demand reduction target. The reduction will last through the winter and end in spring as the EU tries to secure other means of fuel for its member countries.
Russian diplomats had warned that the sanctions on Russian oil would affect the EU and UK adversely prior to the invasion.
Hours after the decision was made, Russia cut gas supplies to Germany even more and now the US must make good on its deal to supply more natural gas to the EU. The EU had pledged to wean itself off of Russian energy by 2027, now that timeline may move up.
Oil prices are extremely volatile and react to the slightest shift in the market. A potential shortage could send oil prices skyrocketing and with it the cost of living. All Caribbean countries with the exception of Trinidad and Tobago import the bulk of their oil from the US, Mexico and Venezuela.
An increase in oil prices could send the surging inflation in the Caribbean to new levels.