Gas war between Russia and Europe 8Gas war between Russia and Europe 8

Europe is more aware of the consequences of the energy crisis, when France announced last week that some of its nuclear power plants had problems and had to be closed for investigation, causing nuclear power prices to increase to nearly 340 USD.

In France, electricity prices on December 20 were nearly 499 USD/MWh, the highest level in Europe and also the highest price since 2009, according to Energy Live.

Austria is the country with the second highest electricity price, with about 490 USD/MWh.

Europe has been struggling with limited electricity supplies, with wind and solar power stations not producing enough energy to compensate for the shortage from nuclear power plants.

But tensions between Russia and Europe are escalating, after NATO accused Moscow of massing large military forces near the Ukrainian border to `prepare to attack the country`, something the Kremlin denies.

`Those moves took place in the midst of Europe’s energy crisis, which was made worse by Russia’s deliberate refusal to take the normal market action of exporting gas to Europe before the cold winter,` Benjamin

Some European officials also believe that Russia, which supplies 35% of the natural gas to the European Union, is using gas as a weapon and exacerbating the energy crisis in Europe.

President Vladimir Putin vehemently denied the accusation, saying it was `baseless` and had no purpose other than political motives.

Gazprom corporation logo at the International Gas Forum in St.

The message was given by Putin in the context of many comments that Russia could turn its dominant role in the European gas market into a `shield` to fend off increasing pressure from the West.

Nord Stream 2 is a controversial topic in relations between Russia and the West today.

On September 21, the International Energy Agency (IEA) issued a statement saying that `Russia can do more to increase gas supply capacity to Europe`.

Some people believe that the current European energy crisis is not entirely Gazprom’s fault, but is a consequence of a series of negative factors, from cold winters, high LNG demand in Asia, too little

However, the question is why Russia does not increase gas production for Europe when it has a large supply, and whether Moscow intentionally withholds gas resources to turn it into a tool to fight against economic power.

Gas war between Russia and Europe

Nord Stream 2 pipeline (dotted line) from Russia to Germany.

Alexander Gabuev, senior fellow at the Moscow Carnegie Center, believes that both market and geopolitical factors must be taken into account when finding answers to these questions.

Over the summer, European companies began to notice Gazprom reducing gas output through the Yamal – Europe pipeline passing through Belarus and Poland, as well as pipelines on the territory of Ukraine.

Gazprom, which has a monopoly on Russian gas exports via pipeline, said it needed to prioritize supply to domestic storage facilities, which it said had been depleted since last winter.

According to Bloomberg estimates, Gazprom’s domestic storage is only at 16%, much lower than the usual level of 35-40% at the end of winter.

Therefore, Gazprom applies a policy of ensuring domestic reserves, while still trying to fulfill contracts with Europe but not providing additional shipments.

Although Russian Deputy Energy Minister Evgeny Grabchak announced that Gazprom would increase the amount of gas transferred to Europe from early November, the energy crisis in Europe still shows no signs of cooling down.

In addition to Gazprom’s reserve purposes, geopolitical issues are considered important factors affecting the European energy crisis.

One of them is Turk Stream, which transports gas from old Russian fields to Southern Europe via Türkiye, with the dual goal of breaking dependence on Ukraine and fostering ties with Ankara .

At the end of 2019, Naftogaz, owned by the Ukrainian government, signed a gas transportation contract with Gazprom until 2024. The contract obligates Gazprom to pump at least 40 billion cubic meters of gas through Ukraine each year starting this year.

Gazprom could buy more shipping capacity through Ukraine but would face higher prices.

`Supplying gas using new pipelines is much cheaper, saving us about $3 billion a year,` Putin said.

Moscow does not want Kiev to gain more profits.

Gas war between Russia and Europe

Workers at the Nord Stream 2 construction site in Kingisepp, Leningrad region, Russia in June. Photo: Reuters.

At the same time, Russia is trying to push Germany to put the Nord Stream 2 project into operation. President Putin and senior Russian officials have made it very clear that resolving the final legal obstacles to inaugurating Nord Stream 2 is

The undersea pipeline laying process is complete, but Nord Stream 2 still needs final approval from the German Federal Electricity Grid Agency and the European Commission before it begins transporting gas.

Although Gazprom is the sole supplier of Russian gas to Europe at this time, the Kremlin could help resolve the impasse by granting pipeline access to Rosneft to break its decades-old monopoly.

Russia is also trying to push Europe to move part of the spot market transactions, meaning additional gas purchases beyond the fixed amount guaranteed by long-term contracts, to a gas trading platform.

Whether Russia can achieve all of these goals at once will depend on many factors such as market conditions, European politics and, of course, the weather, according to Alexander Gabuev of the Carnegie Moscow Center.

`The energy crisis shows that Russia will still play a huge role in the EU’s energy issues in the near future,` Gabuev said.

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