U.S. proposes Russian gas deal with Europe to secure Ukraine ceasefire

U.S. proposes Russian gas deal with Europe to secure Ukraine ceasefire
Model of natural gas pipeline, EU and Russia flags, 18 July 2022.
Reuters

The U.S. administration has reportedly proposed restarting Russian gas supplies to Europe through Ukraine as part of efforts to secure an energy ceasefire ahead of winter.

According to a report by The Wall Street Journal (WSJ), citing U.S., European and Ukrainian officials, U.S. President Donald Trump's envoys, Jared Kushner and Steve Witkoff, discussed the possibility of selling Russian gas to Europe through a U.S. intermediary during visits to Moscow and Kyiv in September.

The proposal is reportedly designed to circumvent European sanctions on Russian gas imports, paving the way for renewed supplies to Europe and opening up investment opportunities for U.S. companies.

Gas deal could encourage ceasefire

U.S. negotiators reportedly see renewed access to Europe's gas market as an incentive for Russian President Vladimir Putin to agree to a comprehensive ceasefire.

White House officials have also suggested depositing proceeds from Russian gas sales into an escrow account in a third country, preventing the Kremlin from using the money to fund its war in Ukraine.

Soviet-era pipelines could reopen

The plan could see the revival of a Soviet-era pipeline network linking the Urengoy gas fields in Siberia to Europe via Ukraine.

However, the proposal faces a major obstacle: the European Union's plan to phase out Russian gas imports entirely by the end of 2027.

Russian gas now accounts for around 11 per cent of Europe's gas needs, compared with approximately 45 per cent before Russia's full-scale invasion of Ukraine. Meanwhile, U.S. liquefied natural gas (LNG) accounts for around 30 per cent of European consumption.

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