Tag Archives: Russia

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

ENGLISH Audio ABOVE }} ARABIC Video BELOS

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.

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Roundtable Invite/Einladung: Threat of Russia-Gulf States oil price war for Asian market? Berlin, Bundestag Press House, 28 July. [Deutsch/English event]

Dear Colleagues & Friends,

I will be speaking at this roundtable here in Berlin on Thursday with two eminent German oil market experts. [See PDF invite, below].

What is happening in oil markets bewteen Russia and esp. Saudi Arabia, competing for the Chiese and larger Asian market? This is a key issue in the effectiveness of EU & USA sanctions against Russia’s oil exports, aimed at limiting the Putin regime’s capacity to war agaisnt Ukraine.

You are cordially invited to this live-only event in Berlin. Our roundtable includes:

  • Dr. Birgit WETZEL – Wirtschaftsjournalistin mit Schwerpunkten Energie und postsowjetische Staaten
  • Mathias BRÜGGMANN – International Correspondent im “Handelsblatt”
  • Dr. Thomas W. O’DONNELL – Wissenschaftler an der Freien Universität Berlin, Experte für globale Energiesysteme, erneuerbare Energien und die Transformation fossiler Brennstoffe
  • Moderation: Ewald KÖNIG, Journalist

Please register ASAP at : events@ggd-berlin.org as room is limited. Sponsored by the Berlin-Gulf Dialogue for Energy Dialogue e.V.

Best, Dr. Tom O’Donnell

My Euronews: Nord Stream1 back on. Putin knows EU will be free of Russian gas in couple years; he’ll weaponize it while he still can. Killing EU-Ukraine solidarity is the target.

Euronews Now host, Mariam Zaidi, interviews me Thursday AM, 21 July, about the meaning of Nord Stream 1 coming back online (albeit by a mere 40%), and why the EU has to prepare for a complet cutoff of Russian natural gas this winter.

In two or so years, the EU will be completly free of dependence on Putin’s gas; and he knows it. So, Putin has two years to use it – as a weapon – or lose it. We have to be ready. Filling storage is not sufficient. There would be gas rationing and cutoffs.

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Is a lack of oil refineries boosting global fuel prices? Al Jazeera asked us, in Houston & Berlin

From: Inside Story, 20 July 2020 – The Saudi Arabian foreign minister, in Tokyo, said the problem with high prices at the pump is a lack of global capacity to refine crude. Out panal included::

  • Bob Cavnar – Energy and oil industry analyst – Houston
  • Thomas O’Donnell – Energy and geopolitical analyst – Berlin
  • Josh Young – Chief investment officer at Bison Interests – Houston

Presenter: Nastasya Tay of Al Jazeera – Doha

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My Al Jazeera. Turbine-in-Canada: Germany gets it back for Russia. Ukraine objects | EU gas crisis looms: Winning this economic war will have costs

ENGLISH Audio above | ARABIC Video below
Video is in Arabic. English audio track is above.

I was interviewed today, 11 July, by Al Jazeera about the Siemens compressor for Nord Stream 1 (NS1) gas pipeline sent by Gazporm to Canada for repairs. Russia cut 60% of the usual 55 billion cubic feet/year (bcm) flow to Germany (and on into other countries) on 17 June claiming it can’t supply more without the compressor returned.

Germany asked for it to be send to Germany and they’d return it to Russia to get Nord Stream 1 flowing. Obviously, Germany is very concerned that there will be a shortage of gas and a major crisis in Germany and the EU if this pipeline flow is cut for long. Putin may cut it anyway, at any time. Certainly, he seems to be planning a 2022-23 wintertime cut to cause a crisis, hoping to disrupt the countries allied with Ukraine against his war there. This is an Economic War of the western alliance of the USA, Canada, EU and others against Russia and its few alliess alongside the hot war in Ukraine.

Ukraine objects to the turbine being returned to Russia and to any sanctions excemptions.

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My Asharq(Bloomberg): What if Russia cuts off EU gas? Do sanctions hurt Russia? How’s Putin’s oil going to India? “This is Putin’s energy war to win his Ukraine war.”

English audio above. }} Arabic video on right

Asharq, Bloomberg’s affillliate in the Gulf Region, interviewed me on the EU and German energy crisis that’s looming as a result of Russian natural gas cuts to Europe and what will this mean as far as an economic crisis?
I made clear that this is Putin’s economic and energy war on Europe in support of his war on Ukraine, to undermine European solidarity with Ukraine.
Asharq asked about how this will affect different countries across Europe.
Also, what is the effect so far of sanctions on the Russian economy. Lastly, we discussed the Russian push to export its oil, now under increasing sanctions by the EU, to India and China and how this is being accomplished and the effects

Comments/Critiques most welcomed..

Best, Tom O’D.

My AlJazeera: Russia cuts exports via Nord Stream 1 by 60%, further weaponizing EU over-dependence, as part of its war against Ukraine. EU winter gas rationing is possible.

Jun 17, 2022 Today, Gazprom announced a further cut in exports of gas via Nord Stream 1 to Germany and on into Europe. Earlier this week, they had cut 40%, now it is 60% of the 55 billion cubic meters per year (bcm) that normally flows in this pipe.

I explained that the Gazprom excuse – -that it could not re-import some compressor parts it had sent to Siemens to repair in Canada due to sanctions — appears as a convenient, manufactured excuse.

I pointed out that a one-off sanctions waiver from the USA, EU and/or Canada for the reimportation of these very specific parts could likely be easily arranged – and if the gas did not again flow fully, Gazprom’s ruse would be clearly exposed.

However, as I said, this is more accurately understood as simply another step in the weaponization of the over-dependence of the European Union (and esp. of Germany, Austria and Italy) on Russian gas imports, a game which Mr. Putin began in earnest in August of 2021.

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My DW live: Gazprom Germania bailout: German policy made EU hostage to Russian energy, enabled Moscow’s Ukraine war | German strategy 1980-2022 was “strategic balancing” of Russia vs USA to carve out a space for its freedom of action within sphere of USA predominance.

My DW Live, 14 June 2022: Gazprom Germania baili out; What was the logic of German elites to partner with Russia on energy?

My live discussion with DW (Deutsche Welle, the German national broadcaster; in English) on 14 Jun 2022 on Gazprom Germania’s Euro 10 b loan from the German state. I stressed that German Energy policy has made the EU hostage to Russian energy, and enabled Moscow’s Ukraine war. Why did Germany do this?

From 1980-to-2022 German elites depended on their Russian oil-and-gas partnership as a means to carve out a space for German capital despite general USA predominance, while still remaining inside the USA-protected Western alliance and global trade system. Their geostrategic gamble — a “strategic balancing” of Russia for perogatives vis-a-vis USA predominance — has led to disaster..

We discussed the reasons the German government is offering up to Euro10 billion to bail out Gazprom Germania, which was a daughter of Russian state gas export monopoly, Gazprom, in St. Petersburg.

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AlJazeera live: EU failes to agree on Russian oil embargo. With months of oil in storage, Druzhba inland refineries are no excuse.

Above ENGLISH Audio || Below ARABIC Video

You comments and critiques rae much appreciated. Tom O’D.

Asharq live: No EU embargo agreed vs. Russian oil. Some too cautious (Germany), others pro-Putin (Hungary). Yet, EU has months of oil in storage. [EN audio, AR video]

Above: ENGLISH Audio }} Below: ARABIC video
I was on with the expert, Sona Muzikarova,a chief economist at GLOBSEC in Bratislava, Slovakia.

We discussed the EU’s repeated failures to impose an embargo in Russian oil. Now, (after Monday 30 May) they are considering a sea-borne-oil-only embargo.

My Al Jazeera: Finland, the Baltics & Poland prepared well for Gazprom’s cutoff. Germany & Austria did the opposite, putting EU at risk.

ABOVE is English audio — BELOW is Arabic video. Recorded live; Al Jazeera, 21 May 2022.

I told Al Jazeera that Finland is well prepared, having worked since 2017 with Estonia, Latvia and Lithuania – the Baltic states – and with Poland to connect them all together with new pipelines, also to access LNG, storage and soon, new supplies from Norway.

Finland has also rented a regasification ship, from a US firm, to receive 5 billion cubic meters per year of LNG, whch will be plenty to supply both itself and Estonia in the wake of Putin cutting off Gazprom supplies of natural gas. Finland refuses, as did Poland too, to pay Moscow in rubles and so are being punished by Putin.

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My Kosatka (Kyiv) Q&A: “Biden’s ‘gas airlift’ & Kremlin revenue. Tom O’Donnell on Russian gas embargo” [Ru/En/Ua]

Kostaka.Media (Kyiv) independent journalists continue informing the Ukranian people on energy affairs. I was interviewed from afar by YAROSLAV MARKIN, TETIANA HUZENKO. We focused on gas issues – would Putin cut Europe’s gas? What have the Americans been organizing, now with the Europeans? How would this affect Europe, Ukraine and Putin’s income?

Below are links to the article in Kostaka’s three languages (EN, RU, UA). I pasted in the English one below, in case you have access problems. This interview had to be written, not audio/video, due to wartime difficulties. [Also, here’s my previous (in-person Kyiv) interview with Kostaka.Media.]

Biden’s Gas Air Lift and the impact on Kremlin revenue: Thomas W. O’Donnell on the russian gas embargo
28 April 2022 — Author YAROSLAV MARKIN, TETIANA HUZENKO

Europe is going to cut the consumption of gas by a ⅔ in 2022, that is obviously will affect the Kremlin’s revenue. However, an embargo is highly possible as well. Both the Kremlin and the EU, in response to Russia’s new war crimes in Ukraine, could stop the gas flows.
In such a case, LNG supplies are to help weather the crisis of 2022-2023 via Biden Air Lift. The last mentioned is being set up by the US and EU diplomats and is patterned on the Berlin Air Lift of 1949. Berlin Air Lift was a system of food and coal supply during the times when the USSR had been blocking land routes.
This would be the end of Russian gas supplies to Europe forever, an international expert and senior energy and geopolitics analyst at GlobalBarrel.com, Dr Thomas W. O’Donnell believes.
He told Kosatka.Media how quickly Europe would be able to abandon Russian gas, what alternative supply routes could be used, and whether Hungary and Austria, obsessed with Russian gas, could prevent this.

The analogue of Putin’s army in the energy sector
How much gas does Europe import from Russia per year? Who are the major consumers?

There are two different market processes whereby Russian gas is purchased by Europe. If we speak about only gas delivered by pipeline, these are:
І. Via long-term contracts, agreements which are for natural gas to be delivered for several years, perhaps from five to as much as 20 years.

ІІ. Via the “spot” market. These are short-term contracts for gas to be delivered the following month. It is also possible to buy gas day-by-day, where traders agree to a price for gas delivered the next day. Here, gas traders consult the future’s market, which has set the price for gas delivered the next day, or the next month, or some number of months in the future.

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Le dije a Radio Clarín Buenos Aires: Putin amenaza con cortarle el gas a la UE/Alemania, pero no tiene otra fuente de dinero. Si lo hace, Biden y la UE organizarán un “Gas-Lift” … [Spanish]

Lo sentimos, la calidad de la comunicación celular desde Alemania no es buena. Por lo tanto, he escrito mi respuesta larga a la primera pregunta a continuación. Las otras preguntas también están abajo. Muchas gracias a los periodistas de Radio Clarín y La Nacion en Argentina (y en París).

Re: Urgente Pedido de Entrevista Periodística – Corresponsales Clarín y La Nación – Argentina

De Maria E… … Fri, Apr 29, 11:50 PM

Dr. O ´Donnell, … Estas son las preguntas para la entrevista del domingo:

1¿Alemania tiene otra posibilidad que no sea seguir comprando el gas ruso? ¿Cuáles serían sus otras opciones?

Repuesta: Antes que nada, muchas gracias por esta oportunidad de hablar con su audiencia argentina.

Pues, debo señalar que hay dos problemas diferentes: el suministro de petróleo ruso a Alemania y Europa y el suministro de gas ruso a Alemania y Europa. Me preguntas por el gas. El gas es mucho más difícil para Europa y para Alemania que el petróleo Hay dos casos: una reducción gradual o parcial de gas o un corte inmediato.

Un corte gradual se puede manejar bastante bien. Ahora Putin está tratando de dividir y conquistar Europa cortando el suministro de gas a Polonia y Bulgaria.

Un recorte inmediato, ya sea por parte de Putin o debido a las sanciones de la UE, crearía una gran crisis energética en Europa. Sin embargo, es importante entender que, al final, Putin está en una posición mucho más débil.

Si Putin corta todos los suministros de gas a Europa, ahora no hay suficiente gas en el mercado mundial para compensar. Pero Occidente, y especialmente EE. UU., la administración Biden, se ha estado preparando para esto al menos dos meses antes de que Putin invadiera Ucrania, incluso antes de que Europa creyera las advertencias de EE. UU. de que Putin atacaría Ucrania.

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Would EU sanctions on Russian oil cost Germany “too much”? No. Scholz & Habeck pose the wrong questions. [Asharq/Bloomberg live: En & Ar]

Above: English Audio || Below: Arabic Video
.

24 April 2022: My Asharq/live evening TV news interview is a bit over seven minutes.

Would an oil embargo be “effective”?

I respond, What is “effective”? Clearly it would not end the war. However, a Ukranian soldier who decides to give his life to resist the Russian invaders has no illusion that his or her sacrifice, on its own, will end the war. But, he will makes what contribution he can.

So, the German leadership refuses to send Ukraine heavy weapons, and certainly won’t send German troops. However, Germany and the EU can at least step up and make this contribution – sanctionRussian oil now. This will greatly hinder Putin’s ability, within two to three months, to finance his war.

  • We discuss the question raised by the German leadership – by Chancellor Scholz (SPD party), Energy and Environment Minister Habeck (Greens) and Finance Minister Lindner (FDP liberals) – that supposedly an embargo in Russian oil (or gas) would do more harm to German citizens than to the Russian leadership.
  • The argument heard repeatedly from Berlin is that this is “not worth it” and also, that such an embargo it “would not end the war.”
  • Also, I answer the question of how much oil could Putin’s Russia divert from Europe to India if the EU and Germany embargoed oil.

I think I posed useful answers to these questions given the time we had. Your thoughts and critiques are welcomed, and solicited.

Best, Tom O’Donnell, Berlin

My Al Jazeera: Yes, the EU can embargo Russian oil now: OPEC’s role, Germany’s Druzhba refineries OK, SPRs, weak demand. [Arabic & English]

Above: ENGLISH AUDIO }} Below: ARABIC VIDEO

Can the EU embargo Russian oil now? I explain yes, it can, and how. Also what OPEC will do. My Live Al Jazeera interview on 12.03.22 (ca. 00:20 CET, 18:20 EST). Here are the main points coved, quickly, from memory.

Afer an initial price spike from an EU embargo, the IEA’s SPR – strategic pertroleum reserves – can make up any shortall of oil for some weeks or so or months while OPEC and the USA increase production.

Especially the UAE and most especially Saudi Arabia have significant excess capacity, at least 2 million barrel/day (mbd) they can add to the market. Oil is fungable, there is one global market, so in principle the shock of an embargo could be ended rather quickly.

Regarding Germany: it is the main EU Member state now opposed to an immediate Russian oil embargo. However, I am confident it is being overly cautious and that Germany can do this now without significant disruptions.

In particular, Germany worries about the fact that several refineries in Germany and Central Europe are located inland, and supplied by the Druzhba Pipeline bringing about 700,000 barrels per day of Urals grade oil (i.e., hevier, sulferous oil) as their feedstock. So, the German government is claiming it would be very difficult to supply these refineries. However, this is not such a problem.

Consider that two German refineries, in the South of Germany, Bavaria for example; these two refineries are on a second pipeline, the Transalpine pipeline. This comes from the port of Trieste Italy. So these two refineries are fine. In an embargo of Russian Druzhba Pipeline oil they can be supplied from Trieste.

However, the refinery the German leaders most worry about is called Svedt, and it is located in Germany near the Polish border, also on the Druzhba pipeline [i.e., PCK Oil Refinery, at Schwedt, Oder River, Brandenburg State, Germany]. However, I can make some immediate points about this refinery.

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