Putin cuts Nord Stream1 to 20%. Gas is Moscow’s key economic lever: Exports earn much less than oil & EU needs two-to-four years to replace it | USA-EU should hit Russian oil harder


We discuss the excuses Putin is giving for cutting Nord Stream 1 flows now from 40% to only 20%. I asserted that they are nonsense. (Various links are below, under Read More.)

This pipeline has been in service since 2011 and there has never been a cut back of flow due to a defective or poorly maintained compressor, and now Russia is claiming a second one is in disrepair. Putin, in Tehran, last week warned he would do this and also said that Ukraine refusing to transit Russian gas through territory Russia has forcibly occupied is another reason he might cut Nord Stream 1 flows. So, this is clearly political, not technical.

This will mean, according to comments recently by Klaus Mueller – head of the German Federal Gas Transit Agency, that it will be impossible to fill German storage to the 95% level the minister has ordered — Mueller had said this was the case even at the former 40% flows of NS1.

I explained the reason Putin is playing this game with gas deliveries – because natural gas brings his regime far less revenues than the all-important business of Russian oil exports, while at the same time natural gas is much harder now for Europe to replace for some years hence from other sources – as it arrives mostly via pipelines from Russia, not by sea like most oil. So, gas is Putin’s greatest lever for now in the energy front of the economic war being waged in support of Russia’s war of aggression against Ukraine.

Putin is aiming, clearly, to damage the European economies this winter in hopes of breaking the solidarity of the European peoples behind Ukraine.

I believe this strategy will backfire. In any case, in two or three years his leverage on gas will be largely gone … which is why he is using it now, while he still can.

Read more

-1- Gazprom will cut Nord Stream 1 gas flows to Germany yet further, now to 20% of capacity. https://lnkd.in/eYqKzdez
(Thanks, Morten Frisch for additional info on this on LinkedIn.)

-2- I will comment on Al Jazeera (Arabic) at 22:20 Berlin time “along with a Russian expert in Moscow.” Don’t know who this will be.

-3- I just looked back at a report on Putin’s press conf. in Tehran. He also blamed Ukraine cutting flows going via occupied UA territory as an excuse to cut Nord Stream 1 flows, behond the hype about compressors being serviced. It seems he can make up a new reason for any circumstance … https://lnkd.in/eMjen2pG

-4- Also, today the German Federal Agency boss Klaus Müller said it would not be possible to attain the 95% level of storage filling that the German government wants by November if NS1 contines at 40%.. So, needles to add, 20% will be even less likely. https://lnkd.in/eVc-deQY

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