The Gazprom management should be offended: Moscow has come up with a clever multi-move for blackmailing the Europeans, and those who are not frightened seem to have not even understood what is happening so far.
After all, the Russian state company has been conducting a special operation for several months now to force the Europeans to fully and unconditionally recognize Nord Stream 2 without any unbundling or other conditions of the EU’s Third Energy Package. To this end, the largest supplier of natural gas to the EU has been purposefully selling reserves from its European gas storages all summer and at the same time demonstratively refused to book additional transit capacities through Ukraine and Poland in excess of the volumes specified in long-term contracts.
The European Union is approaching winter without its usual gas reserves
As a result, a few weeks before the start of the heating season, the filling level of gas storage facilities in the EU countries was at a record low, and wholesale gas prices on European trading floors soared to unprecedented heights. This rise was facilitated by the shortage of liquefied gas, since all summer LNG went mainly to Asia, where prices for natural gas turned out to be even higher. Gazprom undoubtedly took this circumstance into account when planning and carrying out its operation.
And now, it would seem, the goal has almost been achieved: the European Union is approaching winter without the usual gas reserves, and if the cold weather turns out to be especially strong or comes earlier than usual, European energy companies will have to urgently purchase scarce fuel on the world market at exorbitant prices or intensively switch to oil and coal, which will also rise in price. It is clear that the company will at least partially pass these costs onto the shoulders of consumers.
In this situation, Gazprom reports that it has completed the construction of Nord Stream 2, and in various forms subtly hints (now the press secretary of the Russian President Dmitry Peskov is helping him in this) that the Europeans will have more than enough gas this winter. , it is only necessary to issue a permit for the operation of this powerful Russian pipeline as soon as possible, with two of its lines at once, and for this to make an exception from the European rules.
Russian media show the greatest interest in gas prices in Europe
And what? But nothing! These are ordinary readers of all kinds of Russian media in recent weeks, almost every day, learn that the Europeans will have to either freeze or fork out this winter, since gas prices on the spot market in Europe have broken through the mark of 600 dollars per thousand cubic meters, approached 700, exceeded 750, rushed to 800, and on September 15 soared to an insane 950.
However, in the European Union, unlike in Russia, only professional market participants and specialists are closely following such an unnatural rise in quotations. The media have so far reported and written very little on this topic, so that the general European public has not yet simply noticed the game of the Russian supplier and, accordingly, has not appreciated it. This is especially noticeable in Germany, which is by far the largest foreign client of Gazprom.
The German public is interested in elections, not futures quotes
The German public is still focused on the fight against coronavirus, it discusses how to bring the vaccination rate of the population to 70-80 percent, argues how to deal with the unvaccinated and with schoolchildren. And, of course, it is focused on the upcoming September 26 parliamentary elections, on televised discussions of candidates for chancellor, on election programs and promises of parties.
This is now an absolute priority for the German media, and not at all a game of speculators with gas futures contracts on industry trading floors. Moreover, German energy companies buy pipeline gas and supply it to end users under long-term contracts.
After the elections, the discussion on gas will go in a direction unfavorable for Moscow
Therefore, what Moscow may have hoped for is not happening: so far there is not the slightest public pressure on the German government to do something as soon as possible against the rise in gas prices, and even more so there is no activity in support of Nord Stream 2 “. But what will happen if a growing number of German consumers begin to receive notifications from energy companies about the need to increase gas prices in existing contracts? Some firms did it back in August.
In this case, after the elections to the Bundestag, the gas topic may still be the subject of increased public attention. But then the discussion will definitely go in a direction that is very disadvantageous for Moscow. After all, at the same time a new ruling coalition will be formed in Berlin, and with a very high degree of probability, both green, tough opponents of Nord Stream 2, the Putin regime and any fossil fuels, and liberals who are skeptical of this gas pipeline and critical – to the Russian president.
Gazprom should be glad that its special operation is failing
In such a situation, the realization that Gazprom, by abusing its market power, is openly blackmailing the European Union, will certainly trigger a new wave of calls to reduce its dependence on Russian gas. Demands will inevitably be heard to speed up the transition to renewable energy in order to completely abandon gas as soon as possible. The question will surely arise how it happened that the largest gas storage facilities in Germany and Austria came under the control of a state-owned company from an authoritarian country. There may be a proposal to legally oblige the operators of gas storage facilities to guarantee a certain level of filling by the beginning of the heating season.
So Gazprom should rather rejoice that the special operation to create an artificial shortage of gas for the sake of pushing through Nord Stream 2 did not work out – and the German public has not yet paid due attention to this adventure. Otherwise, you will not end up in trouble in your largest sales market, where they are already preparing for the accelerated decarbonization of their economy.
Posted by Andrey Gurkov, economic commentator German wave
The commentary expresses the personal opinion of the author. It may not coincide with the opinion of the Russian edition and German wave generally.