Putin benefits from rising gas prices – latest news / NV

Whatever Russia has lost by restricting gas supplies, it has benefited from a sharp rise in prices. And mainly due to Moscow’s own tactics to create energy weapons

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Since mid-June, Russian producer Gazprom has reduced gas flows along the Nord Stream 1 corridor to Germany by about 60% of daily contract volumes, prompting the federal government in Berlin to raise the alert level to an alarming level. (the second level of danger out of three possible) and prepare for the worst. Gazprom claims the cut was because a turbine needed to run Nord Stream 1, which was sent to Canada for repairs, could not be sent back due to sanctions.

Some observers have exposed Gazprom’s bluff and said its actions appear to be politically motivated. They pointed out that if Gazprom were truly commercially oriented, it would make up for the drop in supplies via Nord Stream 1 by increasing supplies via the Ukrainian transit route. Instead, the state-owned Russian energy giant opted to maintain limited transit through Ukraine, sending only 40% of supplies.

With Nord Stream 1 undergoing ten days of maintenance since July 11, there are voices suggesting that Gazprom could use the shutdown as an excuse not to resume flows after July 21, provoking further chaos in the gas markets. While there is a possibility that Russia will cut supplies to a minimal level or cut them altogether, the extent of the damage it could cause and Europe’s ability to weather the harsh winter will depend on the measures that are taken now.

EU may cut off gas supplies from Russia sooner than some think

So far, Russia’s use of natural gas supplies as a political weapon has been largely successful. Gazprom’s decision not to send more gas to Europe in 2021 despite rising post-coronavirus demand, reduced supplies to several European countries and companies since the start of the war in Ukraine, and the recent sharp cuts in supplies via Ukraine and Nord Stream 1 are all helped raise prices to record levels.

Whatever Russia has lost by restricting gas supplies, it has benefited from a sharp rise in prices.