Putin flexes muscles in gas crisis

07 october 2021
Today at
17:20

–

With the promise of extra gas supplies, Russian President Vladimir Putin calmed the blind panic in the energy markets. In one go he highlighted Europe’s dependence on Russian gas.

–

‘Let’s think about the possible increase in supply on the market.’ With that one sentence, President Putin managed to push prices down on the overheated gas market on Wednesday. He hinted that Russia’s state gas company Gazprom is willing to ramp up supplies to Europe to allay panic ahead of a potentially harsh winter.

–

With his gesture, Putin generously presented himself as the lifesaver, although he did not clarify how concrete the aid will be. Tellingly, after his redeeming sentence, he remarked, “We have to approach it carefully.” It seemed as if Putin wanted to make it clear that Russia will set the pace to end the crisis, not Western customers.

–

The essence

Russian President Putin announces an increase in gas supplies to Europe.
Several countries accuse Moscow of market manipulation by lowering gas exports.
With his gesture, Putin wants to speed up the commissioning of the controversial Nord Stream 2 gas pipeline.

–

Some saw the outstretched hand as a cynical move because Russia would have caused the gas crisis. Thijs Van de Graaf, an expert in energy policy and geopolitics, disagrees. “The crisis is not Putin’s master plan, but the result of a series of factors, such as the economic recovery after the corona pandemic and low stocks due to a late winter break.”

–

Trustworthy partner

Russia has been under pressure from all sides in recent weeks to export extra gas. The boss of the International Energy Agency (IEA) said on Thursday that Gazprom could easily increase exports by 15 percent. The IEA had previously said that the gas crisis was an excellent opportunity for Russia to show that it is a reliable partner.

–

You don’t want to experience energy being turned into a weapon.

Jennifer Granholm.

United States Secretary of Energy

–
–

–

However, there is great mistrust about Russian motives. Ukraine leads a platoon of countries accusing Moscow of market manipulation. The Americans are also keeping an eye on the matter. “You don’t want to see energy being turned into a weapon,” said Energy Secretary Jennifer Granholm.

–

Russia denies that it fueled the crisis by supplying less gas. Putin emphasized that Gazprom is heading for record exports to Europe this year. ‘The Russians say they are fulfilling their contractual obligations,’ says Van de Graaf. “Only there was a temporary interruption due to maintenance on the important Jamal pipeline. Was that a conscious move? That is unclear.’

–

Langetermijncontracten

Putin bounced the ball back on Wednesday. According to him, European authorities and energy companies are responsible for the gas crisis because they do not opt for long-term contracts, but prefer the spot market, with direct deliveries. “Today it is clear that that approach is wrong,” the president said. “They made mistakes.”

–

Putin’s gesture was intended to highlight Nord Stream 2.

Thijs Van de Graaf

Energy policy and geopolitics expert

–
–

–

The West fears that the Kremlin will again use its dominant position in the gas market – Russia is the world’s largest gas producer – as a geopolitical weapon. In the winter of 2005-2006, Gazprom cut off gas supplies to Europe after a dispute with Ukraine, a crucial transit country. It was no coincidence that the conflict coincided with Ukraine’s rapprochement with the EU.

–

Ukraine also plays a role in this crisis. Putin announced that Gazprom will soon be pumping more gas through the Ukrainian pipeline. According to him, more gas than contractually agreed will flow via this traditional route. But Putin also made it clear that the old transit route is unsuitable in the long term, because of ‘unprofitable’ and polluting.

–

Nord Stream 2

The president put forward an alternative: Nord Stream 2, the 1,244 kilometer long gas pipeline through the Baltic Sea to Germany. According to him, it is a lot more environmentally friendly than the Ukrainian route. ‘Putin’s gesture was intended to highlight Nord Stream 2,’ says Van de Graaf. The project was recently completed, but is not yet operational.

–

–
–

With his comment, Putin appeared to be using the gas crisis as leverage to quickly activate Nord Stream 2. A permit is still required from the German energy regulator. That can take months. “Quick start-up of Nord Stream 2 will significantly help balance gas prices in Europe,” Putin’s spokesman said recently.

–

A normal supplier would use the high gas prices to increase exports and make money. The Norwegians do. The Russians don’t

Thijs Van de Graaf

Energy policy and geopolitics expert

–
–

–

Russia wants a blockade of Nord Stream 2 avoid. Work on the pipeline was halted for a long time due to US sanctions. The project is controversial because it is seen as a symbol of Europe’s growing reliance on Russian energy. With a share of 43 percent, Russia is already the largest supplier in Europe. That figure will continue to rise.

–

According to Van de Graaf, it is crystal clear that Moscow is taking advantage of the gas crisis to promote Nord Stream 2. “The gas supplies are a tool for the Kremlin’s geopolitical purposes. A normal supplier would use the high prices to increase exports and make money. The Norwegians do. The Russians don’t.’

–

Top 3 cheapest SUVs with automatic transmission available in Romania

Internet Laughs With New Name Facebook, "Meta" Sounds Like "Death" In Hebrew

Let go of all brakes one more time in one of the most famous discos... (Antwerp)

Stock index futures fluctuated upwards, IH main contract rose 0.69% | stock index futures_Sina Finan...