Russia relaxes the gas markets – that will not solve the energy crisis

Berlin, Brussels It is the first sign of relaxation, but the European energy crisis has not yet been resolved: Russia’s announcement that it will deliver more natural gas to Europe “cannot yet be seen as a fundamental turnaround or an improvement in the situation, the volatility remains high,” said Jörg Selbach -Röntgen, head of the gas trader MET Germany, the Handelsblatt. It remains to be seen how massive the additional capacity bookings will be. “A quick commissioning of Nord Stream 2 would have a completely different weight,” said Selbach-Röntgen.

The Russian President prophesied that this should ease the situation on the European energy markets. At a televised cabinet meeting, Gazprom chief Alexei Miller stated that domestic storage facilities should be completely full by November 8.

Gregor Pett, Head of Market Analysis at Uniper, Germany’s largest natural gas importer, points out that the Russian side has already signaled several times that it will have solved the problem of low storage levels in Russia from the beginning of November. “That could contribute to easing the situation to a certain extent,” said Pett to the Handelsblatt. “However, you have to take into account that Gazprom should attach great importance to supplying its own customers in Russia before throwing additional gas onto the European market,” he added.

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Pett believes the situation remains difficult because of the high demand. “Gazprom is delivering more natural gas to Turkey this year than in previous years,” he said. In addition, Russia also supplies China via the relatively new “Power of Siberia” line. “The Chinese pay high prices because they do everything they can to ensure their economy is supplied,” he said.

German gas storage facilities fuller than feared

For relaxation, he said, some Asian countries have become more cautious. They stopped buying at any cost. “That takes pressure off the market,” said Pett. In addition, the Norwegians have completed maintenance work, which increases the delivery volume from Norway.

In addition, the filling level of the gas storage facilities in Germany is “now somewhat higher than feared a few weeks ago,” said Pett. According to the gas storage association INES, the level of storage in Germany is currently 71 percent. Three of these storage facilities are wholly or partially owned by Russia.

Gas prices had recently risen sharply due to low inventories and growing demand after the pandemic crisis. Critics accused Russia of keeping its gas supply artificially scarce in order to increase the pressure for an early commissioning of the completed Nord Stream 2 gas pipeline.

Russia’s reputation as a reliable gas supplier threatened to be seriously damaged in the face of the energy crisis in Europe – even in Germany, which has vehemently defended the energy partnership with Moscow in recent years.

The Russian leadership is partly responsible for this development. Because Kremlin representatives and Gazprom managers had repeatedly indicated in the past few months that an expansion of the deliveries would only be possible after the commissioning of the new Baltic Sea pipeline Nord Stream 2.

Putin himself had also said: “The first pipeline from Nord Stream 2 is full, and if the German authorities approve tomorrow, deliveries of 17.5 billion cubic meters will begin the day after tomorrow,” the Kremlin chief said a week ago .

The operating company Nord Stream 2 AG applied to the Federal Network Agency for certification as an “independent transport network operator” at the beginning of September. The regulatory authority now has until January 8 to make a decision.

The Federal Ministry of Economics announced on Tuesday that an analysis of the Federal Network Agency’s certification process came to the conclusion that “the issuing of a certification does not endanger the security of the gas supply to the Federal Republic of Germany and the European Union”. Opponents of the line, such as the USA and Ukraine, argue that Europe is thus becoming heavily dependent on Russia.

Altmaier promises security of supply

The outgoing Minister of Economic Affairs Peter Altmaier sees no problem in supplying Germany with natural gas. “We will have security of supply this winter,” said the CDU politician. “The gas storage facilities are now properly filled again.” The decline in gas deliveries to Europe is not due to the fact that Russia is not meeting its obligations. Rather, many gas traders were hesitant to place orders because they had been waiting for better prices.

Nord Stream 2 critics remain skeptical despite the recent pledge from the Russian President. “The fact that the blackmailer says that he now wants to act a little more courteously does not change the overall constellation,” said Green European politician Reinhard Bütikofer. “If Putin manages to force Nord Stream 2 to be certified, his leverage will be even more powerful against us,” he warned.

At the beginning of the week, Amos Hochstein, the US government’s special commissioner for energy security, made a similar statement. If Russia has gas for deliveries via Nord Stream 2, it can also export more via the existing pipelines, Hochstein emphasized. Otherwise it would be “difficult to argue” that Russia is not using the energy supply as a weapon.

This assessment has direct political consequences: The German government promised the USA in the summer that it would impose new sanctions if Russia uses “energy as a weapon”. The dispute over Nord Stream 2 is thus also burdening the coalition talks in Berlin. The SPD does not believe in sanctions and continues to support the Baltic Sea pipeline.

Should Russia actually deliver more gas without making the final certification of Nord Stream 2 AG as an “independent transport network operator”, the conflict would be defused for the time being. But it is too early to give the all-clear: “The political situation is worrying. Putin is playing with fire because he is increasingly entering an asymmetrical confrontation and viewing energy prices as a foreign policy instrument, ”says Christian Ehler, Member of the European Parliament for the CDU.

In doing so, the Kremlin boss is jeopardizing the reputation of a reliable supplier that Russia acquired during the Cold War. “However, Putin is not economically strong enough to maintain an aggressive external energy policy,” Ehler points out. “The Russian state budget is in a fragile state and depends on the proceeds from gas exports.”

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