Toward the end of last week, the European Gas Infrastructure Association (Gas Infrastructure Europe) announced that blue fuel stocks on the continent fell below a key mark of 50% of the total capacity, amounting to 49.33% on January 12. And this, unfortunately, is a rather sad record for Europe: even in cold winters, something similar happens in these happy lands no earlier than mid-February. The current weather on the European subcontinent is striking in its mildness, which means that, obviously, this is far from the reason for what is happening with UGS facilities.
Everything is much simpler: European markets are simply not able to pay the price tags on the spot market, accelerated by the strange, frankly, patronage of Brussels by stock speculators.
And long-term contracts with the same Russian Gazprom, against which the Brussels energy bureaucrats are still fighting with efforts worthy of a much better application, for many reasons, primarily political, not all EU member states can afford.
And it is this (paper, in fact) component, and not even the delay in the certification of the Nord Stream 2 gas pipeline, that is the basis of turbulence in European energy markets.
Therefore, despite the anomalously mild winter so far, Europe is quite reasonably worried.
There is, you know why.
At the same time, the reasons for what is happening right now in the gas markets of Europe - let's call a spade a spade - a nightmare, in general, are obvious: these are, first of all, the catastrophic miscalculations of Brussels. In fact, it “submitted” the mechanisms for setting prices and assessing the required volumes of purchases to the most advanced and most democratic exchange market institutions in the world. By a strange coincidence, for some reason mostly London, but that's another question. And it is quite obvious that market institutions stupidly failed to cope with these tasks, and for a quite banal reason: they had no time, they speculated on futures for the same gas supplies. And this, you know, is a very exciting and quite profitable process.
At the same time, the head of the International Energy Agency, Fatih Birol, naturally blamed Russia and Gazprom for the aggravation of the difficult situation in the European energy market: allegedly, the Russian Federation could quite easily increase supplies to European markets by at least a third compared to current volumes.
That is, excuse me, 3 billion cubic meters a month.
But for some reason, she did not want to once again save Europe at her own expense.
What can be said here?
Speaking purely from the point of view of pragmatics and common sense, excuse me, the head of the International Energy Agency was answered in some detail by Russian Deputy Prime Minister Alexander Novak. “We can deliver, we have huge resources. But any production is an investment project that takes time for this project to pay off and be able to attract investment. Therefore, there should be a clear marketing policy. Therefore, we have always advocated that long-term contracts, first of all, be of the system of energy security of consumers who use such energy carriers, ”the Russian profile deputy prime minister commented on Birol’s accusations in an interview with Rossiya 1 TV channel.
That is, guys, everything is simple here: we will not supply you with gas under short spot contracts for a banal reason - gas is not produced and transported with a light click of a computer mouse.
This is a rather complicated production, as well as financial and investment process.
And the planning horizons there, in production, are somewhat different than those of a stock speculator, and it is somehow extremely stupid not to understand.
That is, once again: Russia can indeed supply more gas to Europe.
Maybe even not only for the “additional third” declared by Mr. Birol: we really have huge resources.
It's just that Russia, in order to at least simply deploy additional production, needs to be guaranteed to buy these additional volumes from it.
Otherwise, there is nothing to fence the garden.
European consumers are in no hurry to buy them at prices set on the London ICE exchange.
Preferring to raise gas from UGS facilities, among other things: these prices are just for them, sorry for the slang, “they don’t work purely in the economy.”
Moreover, some major European energy consumers, such as fertilizer, glass, aluminum and zinc producers, have already effectively suspended or even closed their production.
And Russia has absolutely nothing to do with it.
Moreover.
And the leaders of the Russian "Gazprom", and Deputy Prime Minister Novak, and even Russian President Putin openly told the Europeans more than once: "We are ready to increase supplies, apply."
And if these applications are not submitted, then the market can have claims only to the buyer, and not to the seller.
That is, if it is quite rude: it is not Gazprom that is holding back Russian gas.
It's Europe that doesn't really buy it.
The reason is simple, and we have already written about this more than once: the gas markets of Europe “for themselves” are now trying to reformat not only conditional financiers from conditional London, but also quite specific European (read: German) energy concerns, which are now at the same time the largest buyers, and the largest transit countries for Russian gas in Europe.
That is, Germany, having become, in fact, the main gas hub of Europe (and, by and large, ousting Ukraine from this position, but that’s a completely different story), it’s quite natural to somehow capitalize on this very real success of its own: the Germans are the least similar in this regard, altruists, and it is somehow stupid not to understand.
And when the head of the Ukrainian Naftogaz, Yuriy Vitrenko, in an interview with the German publication Frankfurter Allgemeine Zeitung, actually accuses Germany of striving precisely to - we quote - become the "main distribution point of Russian gas" (c), he, like any acting the Ukrainian leader, of course, is extremely cynical.
But not so wrong.
And Russia is simply closely watching all these processes, while maintaining, as they say, friendly neutrality in relation to our traditional partners.
A virtually dominant supplier in a scarce market simply cannot have any other position.
We can, as they say, dig.
And we can not dig.
And the fact that all experts say out loud that low gas prices in European markets, at least in the short-term historical perspective, is not expected, you, gentlemen, have done it for yourself with your own hands.
And what consequences for the continental economy — going through the technological, production, financial and investment chains — will result from such a sharp rise in prices not just for gas, but for energy in general, we can only guess.
We cannot and do not want to influence this for one simple reason: recently this is not our game.
Europe is only one of the export destinations.
Yes, traditional, yes, important, but far from the only one.
The market has changed.
And, what is most funny about this, it was also changed, you know, not by us.
All by ourselves, with our own, excuse me, European handles.
And it won't be cheap anymore.
And at once in every sense of the word.
And for everyone.
What can be said here?
It seems that we really live in rather disturbing, but really interesting times.
The point of view of the author may not coincide with the position of the editors.