The war in Ukraine is taking another notch up the escalation ladder, with Russia again launching massive strikes on Ukraine’s energy infrastructure and Kyiv firing US-supplied long-range missiles into Russia. US President Joe Biden’s decision to allow Kyiv to use the Army Tactical Missile Systems (ATACMS) inside Russia prompted the Kremlin to alter its nuclear doctrine to expand the range of threats under which Russia could use nuclear weapons. Beyond the nuclear saber-rattling, Russia is making gains on the battlefield ahead of expected major shifts in US policy. Western capitals are also worried Moscow will escalate in other ways, such as accelerating hybrid and sabotage attacks in Europe. In this escalatory context, Russia’s history of weaponizing energy raises questions over the extent to which Europe’s energy sector — and its broader energy security — are at further risk.
Jostling for Leverage
A weakened Biden is using his last two months in office to bolster Western support for Ukraine ahead of Trump’s return to the White House. Some Trump advisers view the lame-duck moves around Ukraine — which include a further wave of financial sanctions announced Thursday, including designating Gazprombank — as an attempt to limit options for the incoming administration as it seeks a negotiated settlement to the war. Ahead of that, all sides are seeking to create facts on the ground. “Putin now has two months to escalate as much as he likes” in a bid to heighten pressure on Trump to push for a deal, the Eurasia Group wrote. “If Kyiv inflicts serious damage on Russia’s military capabilities, that could shape the Kremlin’s thinking … The race for leverage is on.”
Salvos and Stalemate
The US decision to allow Ukraine to use ATACMS inside Russia and a similar move by the UK for its Storm Shadow missiles are testing Russia’s increasingly blurred redlines. That raises the risk of miscalculation, and the need for Moscow to restore deterrence. Russian President Vladimir Putin on Thursday said Moscow had the right to target military facilities of those countries allowing their weapons to be used on Russian facilities. “There will always be a response,” he said in a televised address.
In a media briefing, Charles Kupchan, a senior fellow at the Council on Foreign Relations, said the use of ATACMS is not a game changer on the battlefield where Russia has been making steady-yet-bloody gains against Ukraine’s outmanned forces along the 1,000-mile front in eastern Ukraine. Some US officials have also told the press that neither Ukraine nor the US have sufficient ATACMS in their arsenal and that the moves are unlikely to make a significant difference on the battlefield. “Allowing deeper strikes with attacks is a mistake because the benefits are small at best for Ukraine, and the risks of escalation in various ways are substantial,” said Ben Friedman, the policy director at Defense Priorities, a Washington think tank. In parallel, the Biden administration also approved providing American antipersonnel mines to Ukraine to hobble Russia’s advances and allowed US military contractors into the country.
Hybrid Threats
Overt Russian attacks on Nato and EU countries’ energy infrastructure are not expected, said Federico Saleri, associate director of global risk at UK security consultancy Control Risks. But there is worry in Western capitals that Moscow will escalate by ramping up hybrid and sabotage attacks in Europe or arm Iran-backed Houthis in Yemen, who have disrupted international shipping. Sabotage is suspected of being behind the cutting of two undersea fiber-optic cables in the Baltic Sea this week. Swedish and Danish officials have said a Chinese bulk carrier that made recent stops at Russian ports, the Yi Peng 3, is “of interest” — although many cables are cut by accident.
The incident has echoes of Finland’s investigation into whether the Hong Kong-flagged Newnew Polar Bear damaged, by accident or design, the bidirectional Balticconnector gas pipeline in October 2023 and of Germany’s investigation into holes found in the gas pipeline to its Brunsbuttel LNG terminal in November 2023. Western security officials say there was an attempt earlier this year to put incendiary devices in packages on cargo planes headed to North America — and believe Russia is behind a number of covert operations in recent months targeting energy facilities, transportation, telecommunications, undersea infrastructure, military and industrial targets.
The foreign ministers of Germany, France, Poland, Italy, Spain and the UK issued a joint statement this week calling out “Moscow’s escalating hybrid activities against Nato and EU countries.” Earlier this month, Nato Secretary-General Mark Rutte said Russia’s “intensifying campaign of hybrid attacks across our allied territories … shows that the shift of the frontline in this war is no longer solely in Ukraine.”
Control Risks’ Saleri said an asymmetric response in the form of hybrid or cyberattacks remains a likely form of escalation. “The Baltic region remains a hotspot for Russia’s sabotage activities,” and deep offshore assets there will likely remain exposed to the heightened threat, he said. Elsewhere across Europe, dispersed and weakly defended assets are the most likely targets, including power transmission facilities, he added.
Russia’s response could also play out in the Middle East, where Washington is struggling to contain multiple conflicts stemming from the Israel-Gaza war. Moscow has deepened ties with partners in Iran, Syria and Lebanon as well as with Yemen’s Houthis — and there are conflicting reports over whether Moscow has provided targeting data to the Houthis to disrupt international shipping. “Russia certainly looks at the war in Ukraine as a global war,” said the Washington Institute’s Anna Borshchevskaya. “In order to create pressure on one theater, they use another theater.”
Gas Supply Risk
Then there is the risk of a further reduction or a complete halt of piped Russian gas via Ukraine after the current five-year transit deal between Moscow and Kyiv expires at the end of this year — with the two sides and EU states deadlocked on a new transit scheme. Unless an agreement is reached, risks will grow for the Ukrainian gas transmission system to become a target of Russian strikes. While piped Russian gas flows to Europe are down nearly 80% from prewar levels, Europe’s imports of Russian gas and LNG are set to rise this year for the first time since 2022.