As Europe faces a frigid winter, Putin benefits from Russia’s gas production

MOSCOW — In Europe, a rise in the price of natural gas has halted factories, stunned politicians and stunned consumers with a cold winter.

For Russian President Vladimir V. Putin, who turned 69 on Thursday, it all added up to his early birthday present.

The Kremlin has for years bucked Europe’s campaign to reduce emissions and diversify its energy supply, efforts that threaten to undermine the Russian economy heavily dependent on oil and gas exports. This fall, as Mr. Putin sees it, the Europeans finally got their arrival: a confluence of events drove energy prices to record highs, putting the Russian president in a position to ride to the rescue.

“Let’s think about a possible increase in supply to the market, but we must be careful in doing so,” Mr. Putin told his energy minister on Wednesday evening, sending gas prices down. Faster than just a few minutes – although they are about seven times as fast as a year ago.

The televised exchange underscored the dominant position that Mr Putin, for now, still holds as the leader of a country supplying more than 40 percent of the EU’s natural gas imports. Russia has previously used its role as a vital energy source to pressure individual countries such as Belarus, Georgia and Ukraine. Now, tensions are about something more existential: the future of Russia’s most important economic bond with Europe and a major geopolitical lever for the Kremlin.

“We decided: ‘We’ll let them cool down a bit this winter and then they’ll be more talkative, and not insist on releasing the gas as quickly,'” Mikhail I., an energy analyst at consultancy RusEnergy. Kritikhin said. “The stakes are too high.”

That kind of hard talk creates deep mistrust in Europe, where critics see Russia as deliberately withdrawing excess natural gas from the market in an attempt to pressure Germany and Brussels to open Nord Stream 2 early. certify from, which will transport large quantities of gas to the western countries. Europe.

The decision by Russian state-owned energy giant Gazprom not to fill its European storage facilities has contributed to higher prices, according to Trevor Sikorsky, head of global gas at Energy Aspects, a research firm based in London.

“The Russians can’t just wash their hands and say they have nothing to do with it,” Mr. Sikorsky said. “It clearly has a lot to do with them.”

The European Commission is looking into claims that Russia is manipulating gas flows to push up prices, but has come to no conclusion. German Chancellor Angela Merkel, whose government has backed Nord Stream 2 and called it a business deal, not a geopolitical strategy, dismissed allegations that Russia was partly responsible for the rise in European gas prices. Is responsible.

“To my knowledge, there is no order in which Russia has said that we will not deliver it to you,” Ms Merkel told reporters on Wednesday. “Russia can deliver gas only on the basis of contractual obligations.”

The White House’s national security adviser, Jake Sullivan, said in an interview in Brussels on Thursday that Russia has a history of using energy “as a political weapon”, but added that “is what is happening here now? Something I would leave for others.”

But he said the United States had “a real concern” that energy supply was not improving demand. He said he had discussed the issue with EU officials on Thursday and that the United States would “prefer an alliance with Europe” to secure more supplies. The US has opposed Nord Stream 2 on the grounds that it would increase European dependence on Russian gas, but in August dropped its threat to block the pipeline.

“We have a fundamental interest in looking at global energy supply, both gas and oil, at a level sufficient to support and prevent a global economic recovery,” Mr. Sullivan said. “We want energy suppliers to take measures to make sure that’s the case.”

Russia is meeting its contractual obligations to European customers, analysts and officials say, but has resisted significantly over-delivering, despite supply rising sharply in demand. It has exacerbated the energy crisis from a variety of factors, including increased demand as the world comes out of the pandemic, a cold end of last winter that left storage tanks low, high demand from China and less wind in Europe. speed of. Reduction in renewable energy generation.

The Kremlin, as is often the case with Mr. Putin’s approach to geopolitics, took the position to gain a strategic advantage. The high demand gave Russia an opportunity to reinforce Moscow’s insistence that European customers sign long-term contracts with Gazprom instead of making short-term purchases on exchanges. And it was a chance to push the EU to issue final approval for Nord Stream 2.

Gazprom’s defenders say the company does not need to deliver more gas than promised in its contracts and that European authorities themselves are to blame if they fail to plan properly.

“Do we have an obligation to deliver additional new amounts of gas? No, we don’t,” said Russian energy analyst Sergei Pikin. “Where should the Europeans get new amounts of gas? Nord Stream 2.”

Russia’s Energy Minister Aleksandr Novak clarified the link to the gas pipeline in a televised video conference with Putin on Wednesday. The certification and approval of Nord Stream 2 by the EU “as soon as possible” would give “a positive sign” that “could calm the current situation,” Mr Novak told the president.

With Nord Stream 2 operational, Russia’s grip on Europe’s energy market will be even stronger – giving Mr Putin more opportunities to influence European politics. And it would reduce Russia’s dependence on Ukraine as a transit country for gas exports to Western Europe, potentially weakening a regional foe.

Mr Putin insisted that Russia was not at fault for Europe’s plight. But he didn’t shy away from one of his favorite forms of criticism—schadenfreude.

“What we are seeing now is the result of their persistent actions, clearly – at least reckless and with dire consequences for the market,” Mr Putin said, referring to European officials. “It was always difficult to talk to these so-called experts, because they do it with a well-known piece of snobbery, their idea is always right, and they never wanted to hear anything else. I hope we see some improvement now.” “

This was an echo of a common line on Russian state television of late – that Europe was falsely blaming Russia for a plethora of sins, even as it requested Moscow to sell more gas.

“They are afraid of the cold and demand that Russia immediately heat Europe,” Dmitry Kiselyov, a state television host, quipped on his prime-time show in September.

On Thursday, the price of natural gas futures continued to fall as traders speculated that Russia would open up a stigma. A senior Gazprom official warned that price volatility in Europe was “volatile” and said the company was supplying gas on top of contractual agreements “where we have such technical potential.”

According to Russia’s Tass news agency, Gazprom official Elena Burmistrová said at a conference in St. Petersburg “we really feel for all countries” are facing the shock of energy prices. “This is a big blow to the economy of any country.”

Anton Troyanovsky reported from Moscow, steven erlanger from Brussels, and Stanley Reed from London. Reporting was contributed by Christopher F. schuetz in Berlin and Oleg Mtsnev and Alina Lobzina in Moscow.

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