Last Wednesday, the NYT quoted my view in, “Europe says Putin’s Gas War is Weakening” (print ed’n, p.1; 7 Sept 2022). I was interviewed by Erika Solomon, in Berlin. It’s a short quote; I explain it further, below the article here: (Or, go directly to the NYT.)
One point I stressed in this and other interviews last week is the short- vs. long-term prospects of the EU-Russian energy war.
Putin’s is now exploiting the EU’s long overdepedence on Russian exports – a dependence actively built up by serial German and Austrian governments against ever-fiercer opposition from successive USA administrations,”Three Seas Region” EU Member states, Ukraine and others. (More on the difficult German policy adjustments being developed now in a future post.)
Short term Putin can and will cause maximum energy and economic crises in the EU by cutting off gas supplies via pipelines from NW Siberia. However, longer term, things are very different.
The EU has already begun increasing its LNG and pipeline imports from other regions, especially the USA, Norway, Qatar, Algeria, Azerbaijan, soon Israel via Egyptian LNG, and etc. Short term this will be a very heavy burden and a fierce test of EU Members solidaarity with Ukraine. Long term, there is plenty of gas in the non-Russian & transatlantic allies’ world, plenty of finance, technology and functioning markets.
Over the remainder of this year and the next one-or-two years, Russia will lose demand for its lucrative pre-war gas business in Europe, a crushing loss to the Russian nation. This will end up depriving Moscow of significant income.
However, this and perhaps a few more winters in Europe promise to be very difficult, with the next two likely the worst energy crises in Europe since WWII.
The Global Barrel 