Will Russia save Europe from energy bankruptcy?

Putin has offered Europe a hand in the fight against high fuel prices.

Profimedia

With astronomical gas prices, many people may get cold this winter.

The prices of natural gas, which also heats a good part of Slovenian homes, have skyrocketed. Just yesterday, they grew by 40 percent at some point, and heating is persistently irritating in cities with a district heating system or a natural gas supply system. Due to the high share of gas-fired power plants in Europe, electricity prices are also rising in parallel with the rise in natural gas prices.

The news of the rise in energy prices has not yet settled well in everyone’s head, but a cold shower, perhaps even literally, will be experienced by many upon receipt of payment slips in the coming months.

Nobody has the answer to the significant rise in prices, which will hit everyone who is dependent on gas in one way or another. European Union leaders will not discuss insurance against the price shock until the end of October, but even if they did, there are no good ideas for solving this heating season. “The causes of high energy prices are not created here in Europe,” the European Energy Commissioner told Britain’s Financial Times Kadri Simson. Brussels also lacks the legal and formal possibilities for rapid intervention in the energy market. The fight against price spikes thus remains in the domain of national governments, which the Commissioner is encouraging to subsidize energy this season. “Our proposals will address long-term solutions,” Simons added. We may hope so in the future a common European energy procurement fund and a common European fuel reserve, and the overhaul of European regulations, which many blame for the current jump in prices, is not to be expected.

Vladimir Putin

Profimedia

Russian President Vladimir Putin is chairing a virtual meeting on energy prices. Following his proposal to increase supply, market prices have fallen.

Putin calmed the markets with a word

An unexpected savior of European consumers, however, could become the Russian president Vladimir Putin, which yesterday offered Russian assistance in stabilizing fuel prices. These have fallen again after a virtual meeting, which was also broadcast on television, although still not at levels that would reassure consumers. Forward contracts are still five times higher than the average for the same period in the last five years, reports the American news agency Bloomberg.

“Let’s consider increasing the supply in the market. But we have to do it carefully, ” Putin said at the meeting. Russia, he said, could start exporting “Record quantities” natural gas, which would help reduce or stabilize prices.

When will Nord Stream 2 get an operating permit?

However, the Russians will not accelerate the pumping of gas without reimbursed service. This is hidden in the Nord Stream 2 project – a gas pipeline between Russia and Germany, which is waiting for the first shipments of fuel. You might otherwise have to wait a long time for these, as the process of obtaining an operating permit is long, complicated and strongly subject to political whims. Putin did not directly mention Nord Stream 2 on television, but hinted that gas supplies to Europe via Ukraine would be more expensive and much less environmentally friendly than using a newer pipeline under the Baltic Sea for additional shipments.

Sending large quantities of natural gas through the Ukrainian pipeline is “Economically unprofitable for [rusko energetsko družbo] Gazprom, because it is more expensive, ” Putin said. “Supply through new pipeline systems reduces carbon dioxide emissions by 5.6 times.”

north stream 2,

Reuters

Nord Stream pipelines 2.

The mistake of European leaders?

European representatives, including the President of the European Commission Ursula von der Leyen, otherwise do not share the opinion of the Russian president. Namely, they believe that Russia, which supplies smaller quantities of gas than expected, is also to blame for the jump in prices. But Putin denies the allegations. Gazprom has fulfilled all its contractual obligations, and gas supplies in the first nine months of this year were close to a record. If Gazprom were to supply the same quantities by the end of the aircraft as before, 2021 would be a record year in terms of cubic meters of gas sold to Europe. “Russia has always been and is a reliable supplier of gas to consumers around the world,” Putin asserted. “We always fully fulfill our contractual obligations,” is added.

The reason for the sharp rise in prices, in his opinion, lies elsewhere. The unexpectedly rapid recovery of the world economy has stimulated demand for energy, and the past long and cold winter has depleted Europe’s gas reserves, the Russian president is convinced. At the same time, the European authorities have made a key mistake. They started supplying gas under short-term contracts, no longer under long-term ones, which are more resistant to rapid jumps and falls in prices, but are also preferred by Russian suppliers.

“Today, it has become quite clear that this policy is wrong,” Putin said. “As a result, gas prices have now broken all historical records and are now approaching $ 2,000 per 1,000 cubic meters.”

We don’t want a cold winter this year

The fall or stabilization of gas prices now depends on the agreement between Russia and Germany on the permission to operate the Nord Stream 2 gas pipeline, but also on the actions of Russian Gazprom, which, according to the proposal of the Russian Deputy Prime Minister Alexander Novak may sell gas stocks on its own electronic platform in St. Petersburg and also in this way raise the quantities offered on the market.

Gazprom, meanwhile, said it expected “Good, cold winter.”


Source: Svet24.si by novice.svet24.si.

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