Energy

Russia took advantage of Europe’s energy crisis, says U.S. official

Russia took advantage of Europe's energy crisis, says U.S. official

Highlights:

  • Russia didn’t cause Europe’s energy crisis, but it did not help either, according to Amos Hochstein, the US State Department, global energy security’s senior advisor
  • Despite declaring it is willing to help, Moscow chose not to provide more natural gas supplies to Europe in November
  • Russian President Vladimir Putin has denied accusations that his country is using energy as a weapon against Europe, saying that Russia is willing to assist Europe

Advantageous Energy Crisis

Russia did not cause the European energy crisis, but it did not assist in its resolution. According to Amos Hochstein, the US State Department’s sr. advisor for global energy security, it instead aimed to profit from the situation.

Hochstein told reporters, “It sure didn’t do everything it could to relieve [the energy crisis] and took advantage of it.”

Despite declaring it is willing to help, Russia chose not to transfer more natural gas supplies to Europe in November, according to auction results from October. Due to increased demand, lower-than-normal inventories, and limited supply, gas prices in Europe reached new highs in October.

In terms of geopolitics, Washington is concerned that Nord Stream 2 will give Moscow too much control over Europe’s gas supplies. Russia supplied roughly 43% of Europe’s gas imports in 2020. Meanwhile, Kyiv is concerned that Russia may bypass the country and steal its gas revenues.

Use of Energy as a weapon

On Wednesday, US Secretary of State Antony Blinken told reporters that the US is keeping a “close eye” on Russia’s use of energy as a political tool.

“We are dedicated, and Germany is dedicated, to take the right action if Russia commits a further hostile act or aims to use energy as a weapon against Ukraine,” he said. ‘Moscow is on the verge of weaponizing electricity’ said Amos.

“Russia has consistently fulfilled its contractual duties and supplied gas to Europe, even during the most difficult periods of the Cold War,” Putin told reporters.

In terms of acceptable energy supply, Hochstein remarked that allusions to contractual amounts are an “excuse” because those levels should be the “bottom, not the ceiling.”

Understanding from the facts

The fact that prices have risen to historic highs indicates that there is an unmet need. As a result, companies should increase supply “above and beyond” contractual requirements to lower prices, he said.

He also stated that Russia, as an energy provider, has a responsibility to expand supplies to assist importers in maintaining normal economic activity and ensuring that GDP growth is not harmed by high oil and gas prices.

He claimed that Russia could not claim to be a “reliable supplier” if it only delivered at contractual levels. Hochstein admitted that they had not broken any laws. However, he claimed that Moscow’s energy policy has been to “never waste a good crisis.”

“Unfortunately,” he replied, “I believe that’s how they’ve been acting.”

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