Putin warns EU that gas supplies could keep dwindling

Escalation of Russia-Ukraine crisis will be in the energy markets: Geopolitical analyst DJ Peterson, president of Longview Global Advisors, joins BNN Bloomberg to share perspective on where the Russia-Ukraine crisis is headed and implications on global energy security. He says that while Russia is profiting from high prices of its oil and gas, creating a buyers cartel for Russian oil will be difficult.

MOSCOW — Russian President Vladimir Putin said Tuesday it is the West's own fault that the flow of Russian natural gas to European customers has dwindled and warned that it could continue ebbing.

Putin's statement further cranked up pressure on the European Union, which fears Russia could cut off gas to wreak economic and political havoc in Europe in the winter.

Speaking to Russian reporters in Tehran, where he attended the talks with the leaders of Iran and Turkey, Putin said the amount of gas pumped through the Nord Stream pipeline to Germany will fall further from 60 million to 30 million cubic meters a day, or about one fifth of its capacity, if a turbine isn't quickly replaced.

He added that Russia could launch the recently completed Nord Stream 2 pipeline that has never entered service, but noted that it would only have half of its designated capacity because the rest has been used for domestic needs.

The Russian leader also warned the West that its plan to cap the prices of Russian oil as part of its sanctions over Ukraine will destabilize the global oil market and make prices soar.

"We are hearing some crazy ideas about restricting the volumes of Russian oil and capping the Russian oil price," he said. "The result will be the same -- a rise in prices. Prices will skyrocket."

Since Russian troops rolled into Ukraine in February, the EU has approved bans on Russian coal and most oil to take effect later this year but did not include natural gas because the 27-nation bloc depends on it to power factories, generate electricity and heat homes.

However, Russia's Gazprom state-controlled natural gas giant reduced gas deliveries through the Nord Stream 1 pipeline to Germany by 60% last month, citing technical problems after a turbine that Siemens sent to Canada for overhaul couldn't be returned because of sanctions. Canada and Germany made a deal to return the turbine, but Putin said Tuesday that Gazprom still hasn't received the relevant documents.

The Russian leader said that Gazprom was to shut another turbine for repairs in late July, and if the one that was sent to Canada isn't returned by that time the flow of gas will ebb even more.

As another reason for the supply reduction, he pointed out that Ukraine closed a branch of a transit pipeline carrying Russian gas to the West through territory controlled by Moscow-based separatists.

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