In Geopolitics Today - Tuesday, April 26th
Explosions in Transnistria as Conflict Spills Across Borders, Russia to Cut Natural Gas Flows to Poland, Colombia’s Oil Industry Struggling to Raise Production
Explosions in Transnistria as Conflict Spills Across Borders
Multiple explosions have been reported across Transnistria in which state-run facilities appear to have been targeted by unknown assailants. Amongst the facilities targeted was a security services building and radio communications towers, prompting the local government in Transnistria and the government in Ukraine to exchange blame over the cause of the explosions. Neighbouring Moldova has also expressed concern, with officials in Chisinau holding an urgent security meeting following the explosions.
The local internal affairs ministry released a statement following the explosions, while the Transnistrian leader, Vadim Krasnoselsky, outright suggested that Ukraine was to blame for allowing fighters into Transnistrian territory to conduct “a terrorist act.” Kiev has denied the accusation, and made the claim that the explosions are part of a Russian false-flag operation. Whoever is behind the attacks, Transnistria is a potential flashpoint in the war between Russia and Ukraine, and signs of instability here are a cause for concern in Moldova. Transnistria is a strip of land with a population of roughly 470,000 people which has been under the control of separatist authorities since a 1992 war with Moldova. The state is controlled by pro-Russian separatists and hosts a Russian military base.
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Russia to Cut Natural Gas Flows to Poland
Russia’s state-owned gas supplier Gazprom has informed the Polish gas company PGNiG that it will halt all supplies of gas to Poland as of Wednesday this week. Gazprom has justified the suspension under new rules which require those countries which have imposed sanctions on Russia to pay for natural gas deliveries in roubles instead of euros. However, PGNiG has refused to acquiesce to Russia’s demands for payment in rubles, and has become the first EU member state to have its natural gas supplies cut.
Russia’s demand to be paid in rubles for its gas is yet to resolved by EU member states. While Russian President Vladimir Putin has warned gas flows could be cut if the new terms aren’t met, the EU has encouraged its member states to maintain payments in euros because Russia’s new mechanism violates existing sanctions. PGNiG relies on Gazprom for the majority of the natural gas imported, with the Polish state-owned company sourcing 53% of its natural gas imports from Gazprom so far this year. Poland's Climate Minister responded to the cut by indicating that Poland has sufficient natural gas in storage and that the move will not lead to a “shortage of gas in Polish homes.” Cutting natural gas supplies to Poland will increase tensions in Europe, and will likely reduce supplies to other EU member states which rely on flows from the Yamal pipeline.
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Colombia’s Oil Industry Struggling to Raise Production
Colombia’s petroleum industry is struggling to recover its production output to levels reached before the outbreak of the COVID-19 pandemic. Data from Colombia’s Ministry of Energy indicates that crude oil production remains low. At the same time, attempts to increase production have been impacted by instability, with sporadic violence working to deter foreign investment in Colombia’s energy sector. As things stand, a confluence of factors point to a deteriorating outlook for Colombia’s oil industry.
The state of Colombia’s economically crucial oil industry moving forward are of considerable concern to policymakers in Bogotá. The petroleum industry in Colombia has been impacted by escalating internal conflicts which are hindering oil extraction operations, particularly exploration activities in more remote basins. Exploration of new basins is a pressing matter for the Ministry of Energy due to dwindling proven oil reserves and low strategic petroleum reserves. With an upcoming election in which Gustavo Petro — a candidate opposed to resource extraction policies — is a favourite to win, Colombia’s oil industry looks set for further setbacks going forward. Moreover, since major US oil companies are heavily invested in Colombia’s energy sector, the election of an anti-extraction candidate would also significantly increase geopolitical risks for Colombia.
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