Economic revival hope after Russia-Ukraine grain deal crashes as Russia cuts gas supply to Europe

In a blow to nations that have backed Ukraine, Russia will once more shut off gas supplies to Europe, just when there was optimism that economic constraints may lessen this week with the restart of Black Sea grain exports. Despite a Russian air strike over the weekend against the Ukrainian port of Odesa, the United Nations said the first ships from Ukraine might set sail in days as part of a deal reached on Friday. The largest crisis in Europe since World War Two, now in its sixth month, is having an impact far from Ukraine as seen by rising oil prices and the prospect of famine faced by millions in impoverished countries.

On Tuesday, the Ukrainian military announced that Russian cruise missiles had struck targets in the south and that Ukrainian forces had also struck back. An after-hours request for comment was not immediately answered by the Russian defence ministry. Earlier this month, President Vladimir Putin warned the West that sanctions ran the risk of sparking significant increases in world oil prices. 

Russian energy company Gazprom announced on Monday that gas supplies via the Nord Stream 1 pipeline to Germany would decrease to 33 million cubic metres per day as of Wednesday, citing directives from an industry watchdog. That is one-half of the existing flows, which are only operating at 40% of capacity normally. About 40% of Europe’s gas and 30% of its oil were imported from Russia before the war.

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The Kremlin claims that maintenance issues and Western sanctions are to blame for the gas outage, but the European Union has charged Russia with energy extortion. The latest cut, according to Germany, has no technical justification. Volodymyr Zelensky, the president of Ukraine, issued a warning that the Kremlin was engaging in an “open gas war” against Europe.

(with inputs from agencies)