The European Union is ready in case Russia decides to cut off gas supplies to the bloc in the wake of the Ukraine invasion and subsequent sanctions, Europe's energy chief told CNBC Thursday.
The EU receives most of its natural gas supplies from Russia. In 2020, the country accounted for 43.4% of the EU's natural gas stock, followed by Norway at 20%.
However, after Western countries imposed severe sanctions on Moscow for its unprovoked invasion of Ukraine last week, there is concern that the Kremlin could retaliate by cutting natural gas supplies to Europe.
"We saw from the previous situation when Russia occupied Crimea and we introduced sanctions that there might be [a] retaliation from the Russian side, so, yes, we are ready that Russia's retaliation might cover the energy sector," Kadri Simson, the EU's commissioner for energy, told CNBC.
"We have contingency plans in case of partial or full disruption of natural gas," Simson added.
Europe has struggled with higher energy prices for several months and Russia's decision to invade Ukraine has put even more pressure on the sector. The benchmark Dutch front-month gas contract hit a new high on Wednesday at $205 a metric ton.
The EU has repeatedly talked up the need to diversity its suppliers, but that has not materialized. Now, amid a war in Ukraine on its eastern flank, the European Commission, the executive arm of the EU, has said it wants to finally put an end to this dependency on Russia.
"We simply cannot rely so much on a supplier that explicitly threatens us. This is why we reached out to other global suppliers," European Commission President Ursula von der Leyen said earlier this week.
