Biden Outsmarts Putin, Rescues EU By precipitating A Drop In Gas Prices.

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US PRESIDENT Joe Biden appeared to have outwitted Russian President Vladimir Putin and aided in alleviating the EU’s gas crisis in the face of mounting pressure over Ukraine and Nord Stream 2.

IN SUMMARY

  • The US has rerouted 20 liquefied natural gas vessels from Asia to Europe.
  • The EU’s energy crisis has gotten worse in the recent week, as France’s nuclear reactors have been shut down and Germany has seen a decline in wind energy output.
  • LNG shipments will help compensate for shrinking Russian gas exports. President Vladimir Putin of Russia has influenced European gas prices to advance his political agenda.
  • Germany and the European Union have not yet reached an agreement on the Nord Stream 2 pipeline.
Gas
Gas

Putin castigated as orchestrating Europe’s gas crisis.

The US has dispatched 20 liquefied natural gas tankers to Europe; some diverted from Asia, where natural gas prices are substantially lower. While this may be a commercial move for US gas corporations, these liquefied natural gas exports will assist in compensating for lower supplies from Russia, the EU’s primary source.

The EU’s energy crisis has gotten worse in the last week, with France suspending nuclear reactors and Germany reporting low wind energy output.

As a result of the resulting electricity deficit, countries have increased their coal and even oil use to keep the lights on and their homes warm, contradicting the COP26 vow to phase out fossil fuels.

Last Monday, Europe’s benchmark gas price set a new high, having increased about 800 percent since the start of the year.

Gas prices fell from record highs following news of the LNG cargoes headed to the continent to provide relief.

US ships transporting liquefied natural gas have traveled to Europe rather than Asia.

Among the ships en route is the Minerva Chios, which departed Cheniere Energy’s Sabine Pass LNG export terminal in Louisiana in mid-November and was en route to the Indian Ocean until being redirected to Europe last week.

Mr. Putin has been accused of orchestrating Europe’s gas crisis, with critics claiming that the Kremlin is abusing its monopoly for political purposes.

Additionally, analysts have accused the Kremlin of using its state-owned gas corporations as a political weapon as tensions in Ukraine escalate.

On the other hand, Mr. Putin’s strategy to utilize Russian gas to advance his agenda may be thwarted when news of US tankers arriving reduced gas prices in the EU.

Gas
Gas

Much of Europe is heavily reliant on Russian gas.

Dutch prices fell to €103 per megawatt-hour on Tuesday, nearly 45 percent lower than the record high of €180.27 set on December 21.

Gazprom, the state-owned company, disputed allegations of price manipulation, noting that the move was motivated by rising at-home demand.

A Kremlin spokeswoman noted that the impending decision on the Nord Stream 2 pipeline also did not influence it, stating that it was a “purely commercial affair.”

Nord Stream 2 is another Russian pipeline in development and is the subject of heated discussions between Germany and the Kremlin.

If the country approves the €10 billion (£8.4 billion) pipeline, it will supply up to 110 billion cubic meters of gas from Russia (BCM).

Germany and Brussels must provide final certification before it can operate, and the recent debate has cast doubt on the project’s future.

Washington, particularly some east European governments, oppose Nord Stream 2, claiming that it will increase the EU’s reliance on Russian gas, which already supplies 35% of the bloc’s gas needs.

During a televised government meeting, the Russian President stated Wednesday that the Nord Stream 2 undersea gas pipeline would help stabilize gas prices in Europe. His words imply that the US’s intention to send 20 LNG tankers to Europe was perceived as a threat to the Kremlin.

The pipeline, which runs beneath the Baltic Sea from Russia to Germany, was completed in September.

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