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As Europe Faces a Cold Winter, Putin Seizes on the Leverage From Russia’s Gas Output | tnewst.com Press "Enter" to skip to content

As Europe Faces a Cold Winter, Putin Seizes on the Leverage From Russia’s Gas Output

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MOSCOW — In Europe, the surge in the price of natural gas has halted factories, startled politicians and alarmed consumers fearful of a cold winter.

For President Vladimir V. Putin of Russia, who turned 69 on Thursday, it all added up to something of an early birthday present.

The Kremlin has for years bridled at Europe’s drive to reduce emissions and to diversify its energy supply, efforts that threatened to undermine a Russian economy heavily reliant on oil and gas exports. This fall, as Mr. Putin sees it, the Europeans finally got their comeuppance: a confluence of events catapulted energy prices to record heights, putting the Russian president in a position to ride to the rescue.

“Let’s think about a possible increase of the supply on the market, but we must be careful in doing so,” Mr. Putin told his energy minister Wednesday evening, sending gas prices down sharply in a matter of minutes — although they remain about seven times higher than a year ago.

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

“We decided: ‘We’ll let them freeze a good bit this winter and then they’ll become more talkative, and won’t insist on quickly abandoning gas,’” said Mikhail I. Krutikhin, an energy analyst at the consultancy RusEnergy. “The stakes are very high.”

That sort of tough talk breeds deep mistrust in Europe, where critics see Russia as deliberately withholding extra natural gas from the market to try to pressure Germany and Brussels to quickly certify Nord Stream 2, the undersea pipeline that will transport huge amounts of gas to Western Europe.

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

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

The European Commission is looking into the claim that Russia is manipulating the flow of gas to push up prices but has reached no conclusion. Chancellor Angela Merkel of Germany, whose government has backed Nord Stream 2 and called it a business deal, not a geopolitical strategy, dismissed charges that Russia is partly to blame for the rise in European gas prices.

“To my knowledge, there are no orders where Russia has said we won’t deliver it to you,” Ms. Merkel told reporters on Wednesday. “Russia can only deliver gas on the basis of contractual obligations.”

Jake Sullivan, the White House national security adviser, said in an interview on Thursday in Brussels that Russia had a history of using energy “as a political weapon,” but added, “Whether that’s what’s happening here now is something I’ll leave to others.”

But he said that the United States had “a real concern” that energy supply was not keeping up with recovering demand. He said he had discussed the issue on Thursday with E.U. officials and that the United States would “like to be aligned with Europe” in securing more supplies. The U.S. has opposed Nord Stream 2 on the grounds that it would increase European dependence on Russian gas, but in August it dropped its threat to block the pipeline.

“We have a fundamental interest in seeing global energy supplies, in both gas and oil, at sufficient levels to support global economic recovery and not stall it out,” Mr. Sullivan said. “We’d like to see energy suppliers take measures to ensure that that is the case.”

Russia has been fulfilling its contractual obligations to European clients, analysts and officials say, but has resisted delivering significantly more even as demand increasingly outpaced supply. That has exacerbated an energy crisis fueled by a variety of factors, including the increase in demand as the world comes out of the pandemic, a cold end to last winter that left storage tanks low, higher demand from China and low wind speeds in Europe that reduced renewable energy production.

The Kremlin, as has often been the case in Mr. Putin’s approach to geopolitics, seized on the situation to gain a tactical advantage. The high demand presented Russia with an opportunity to bolster Moscow’s insistence that European customers sign long-term contracts with Gazprom, rather than making short-term purchases on exchanges. And it was a chance to push the E.U. to issue final approvals for Nord Stream 2.

Gazprom’s defenders point out that the company is not required to deliver gas beyond what it pledged in its contracts and that European officials have themselves to blame if they failed to plan properly.

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

Aleksandr Novak, the Russian energy minister, made the link to the gas pipeline explicit in his televised video conference with Mr. Putin on Wednesday. Certification and approval of Nord Stream 2 by the E.U. “as fast as possible” would give “a positive signal” that could “cool down the current situation,” Mr. Novak told the president.

With Nord Stream 2 operating, Russia’s hold on Europe’s energy market would tighten even further — giving Mr. Putin more opportunities to influence European politics. And it would reduce Russia’s reliance 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 predicament. But he did not shy away from one of his favorite modes of criticism — schadenfreude.

“What we see now is the result of their persistent actions, frankly speaking — careless at the least and with dire consequences for the market,” Mr. Putin said, referring to European officials. “Talking to these so-called experts was always rather difficult, because they do it with a well-known portion of snobbery, their view is always right, and they never wanted to hear anything else. I hope we’ll see some corrections now.”

It was an echo of a common line of late on Russian state television — that Europe was falsely blaming Russia for a litany of sins even as it pleaded with Moscow to sell more gas.

“They’re afraid of freezing and demanding that Russia warm Europe up immediately,” a state television host, Dmitri Kiselyov, quipped on his prime-time show in September.

On Thursday, the price of natural gas futures continued to fall as traders anticipated that Russia would open the spigot. A senior Gazprom official warned that price volatility in Europe was “destabilizing” and said the company was supplying gas on top of contracted agreements “where we have such a technical possibility.”

“We genuinely feel for all countries” experiencing energy price shocks, the Gazprom official, Elena Burmistrova, said at a conference in St. Petersburg, according to Russia’s Tass news agency. “This is a colossal shock to the economy of any country.”

Anton Troianovski reported from Moscow, Steven Erlanger from Brussels, and Stanley Reed from London. Reporting was contributed by Christopher F. Schuetze in Berlin and Oleg Matsnev and Alina Lobzina in Moscow.


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