In Geopolitics This Week
Russia Cuts Natural Gas Supplies to Bulgaria and Poland, The United States Broadens its Goals in Ukraine, Diplomatic Expulsions Degrade Russia's Spy Network Across Europe, and other stories.
Russia Cuts Natural Gas Supplies to Bulgaria and Poland
Russian state-owned natural gas company Gazprom has announced that it has suspended all natural gas deliveries to Bulgaria's state-owned Bulgargaz and Poland's state-owned PGNiG this week. The Russian move comes after both companies refused to comply with Gazprom's new payment demands, which requires its customers to use rubles for all natural gas payments. The decision by Gazprom to suspend all natural gas deliveries sends a message that Moscow is willing to halt energy supplies to those unwilling to bypass sanctions on Russia's central bank.
Under Russia's new payment mechanisms, importers of Russian natural gas are required to establish an account in dollars or euros at Gazprombank, and must then exchange their payments into rubles via a second account. Yet any EU member state executing such payments would be in violation of EU law due to the fact that payments in rubles would involve the transfer of funds to Russia’s central bank — a sanctioned entity within the EU. Despite this, energy companies in four EU member states are reportedly preparing to register with Gazprombank as major energy companies in Austria, Germany, Hungary, and Slovakia have indicated that they are set to meet Russia's demand to pay for natural gas in rubles.
The immediate impact of the supply suspensions to Bulgaria and Poland will likely be limited. Bulgaria has substantially boosted natural gas imports from non-Russian sources in recent years, relying more on the Southern Gas Corridor pipeline system delivering gas from Azerbaijan. This trend is set to continue when a new interconnection with Greece becomes operational later this year. To speed up the development of the IGB pipeline project, the Bulgarian and Greek governments have held talks since Russia cut natural gas supplies to Sofia.
Poland is also relatively well-positioned to withstand the loss of Russian natural gas supplies. The country has pipeline interconnections with Germany and Lithuania, as well as a liquefied natural gas import facility. Moreover, new natural gas interconnections with the Czech Republic and Slovakia, as well as the Baltic Pipe project, are all slated to become operational later this year. This means that Poland only needs to be concerned about securing alternative supplies in the near-term to avoid importing natural gas from Russia altogether in the years ahead.
While Bulgaria and Poland are likely be able to withstand the supply disruption, decisions made by other EU member states before upcoming payment dates could bring about more serious repercussions for Europe. Russia's threat to cut off natural gas supplies for two EU member states sends a clear message to those most reliant on Russian natural gas in Europe. Shunning Russia's payment demands would likely trigger an economic recession in some EU member states, and would therefore be a difficult decision for policymakers in European capitals to make. Russia, having weaponized natural gas supplies, now needs to move quickly as its leverage over certain EU member states will diminish if the EU is able to facilitate alternative sources of natural gas for its members.
The United States Broadens its Goals in Ukraine
Step by step, the United States is increasing its involvement in the war in Ukraine. Washington continues to transfer weapons and other forms of political, military, and financial assistance to Ukraine while simultaneously broadening the scope of its own stated political goals in the conflict. The Pentagon has begun to discuss ways in which it is actively assisting and training Ukrainian troops to use the growing number of advanced and heavy weapons they are receiving from NATO member states. In addition, public statements made by US officials recently have expanded the scope of Washington's stated political interests to include the weakening of Russia.
US Defense Secretary Lloyd J. Austin recently made a statement following a visit to Ukraine in which he signalled a broadening of stated US goals in the developing war in Ukraine. According to Austin, a key goal of the current US administration is now to see Russia “weakened” to such a point that it would no longer be able to invade a neighbouring state. Such a shift in goals indicates a deeper US involvement in efforts aimed at helping Ukraine achieve a battlefield victory over Russia going forward.
An increase in military support is sure to degrade Russia's military capabilities further in the coming weeks, with some estimates already projecting considerable Russian losses in the war so far. Yet if Washington is seeking to also use the war in Ukraine to significantly weaken Russia, the weeks ahead are likely to see fighting intensify across Ukraine at a time when neither Washington nor Moscow is pursuing a negotiated settlement.
Increasingly, statements made by US officials imply that there exists a US commitment to underwrite Ukraine’s military capabilities until such a time Kiev has successfully reconquered all of the territory occupied by Russia since it launched its invasion in February. Leaders in the US and other NATO member states have called for a restoration of the boundaries as they existed before the 24th of February “as a minimum” precondition to any peace deal. However, given that Ukraine is still far from being able to achieve such goals on the battlefield, pursuing a battlefield victory against Russia in Ukraine short of direct intervention for the US will likely compel Washington to increase the quality and quantity of arms being transferred to Ukraine.
Perhaps assessing that victory for Ukraine is attainable with increased assistance, US policymakers now seem committed to increase military transfers and active cooperation as means of facilitating a degradation of Russia's ability to conduct both the war. The Biden administration has requested that Congress approve a $33 billion aid package for Ukraine that would include a considerable boost to military assistance for the country's armed forces. The vast majority of this proposed aid package, some $20.4 billion, is marked for direct military assistance to Ukraine and efforts to strengthen NATO security in the region. Washington has vowed to ensure that Ukraine has the resources needed to win the war, and the Biden administration has reiterated commitments to maintain uninterrupted aid flows until such a time.
Diplomatic Expulsions Degrade Russia's Spy Network across Europe
Diplomatic expulsions conducted by a host of European countries has already led to more than 200 Russian diplomats being expelled since Russia invaded Ukraine in February. The majority of these expulsions have been accompanied by statements which allege that the Russian diplomatic personnel are conducting espionage, with each EU member state justifying expulsions on the grounds that Russia’s diplomats violated the terms of their diplomatic status. This wave of diplomatic expulsions is considerable and will serve as a major setback to Russia's spying activities in Europe going forward.
It is typical of major powers to use their foreign embassies and consulates pursue espionage activities while also conducting diplomacy. Diplomats work under an “official cover” as they operate with recognized diplomatic immunity doing legitimate work, but at the same time, these same state representatives also function as spies. The vast majority of this work involves crucial human intelligence, work like recruiting and handling assets, facilitating and overseeing operations, and sending constant intelligence updates back home.
The extent to which Russian diplomats conducted espionage activities across Europe under diplomatic immunity is unclear, and while the mass expulsion will work to severely limit Russian spying capabilities in the near-term, the impacts will likely diminish over time. A strong espionage network like Russia's should be expected to be resilient enough to withstand the loss of personnel, even when expulsions number in the hundreds. Russian intelligence services' ability to adapt to the changing environment of the modern era are likely to determine how resilient Russia's espionage efforts in Europe will remain going forward.
While spies on the ground still remain a major component in an effective intelligence collection and operations strategy, their centrality to intelligence networks has diminished in the cyber age. Unlike working with human assets, cyberespionage operations can be undertaken from anywhere in the world, and they afford a kind of plausible deniability that is impossible to achieve with human assets on the ground. The cyber domain not only offers advantages over in-person intelligence operations, but also supports state efforts at conducting information warfare. When it comes to Russia, the country is no stranger to the cyber domain, and possesses the capabilities to conduct sophisticated cyber espionage operations. Russia is expected to continue to be a major player in cyberespionage going forward, a capability that is not blunted by diplomatic expulsions.