Gas prices: Putin ‘going to keep squeezing’ says expert
He has not (so far) made a new territorial grab in Ukraine’s mining and industrial Donbass region, notable for its large coal reserves. But for a while the West – and Kiev – were worryingly unsure as to his intentions. Now Putin has a new game. Some would call it weaponising gas supplies and threatening a literal Cold War this winter as he rations energy through his snaking pipelines, potentially leaving homes in Britain and the rest of Europe shivering.
Gas prices are spiralling and Western politicians are already feeling the wrong kind of heat as smaller suppliers crash.
To many in the West, this looks like nothing short of Russian hybrid warfare akin to his brutal ally in Belarus, Alexander Lukashenko, who has been actively flooding Europe with illegal immigrants from Iraq and elsewhere in revenge for sanctions.
But the gas conflict had a curious origin in deepest Siberia in early August.
A mysterious fire at a processing plant near the city of Novy Urengoy led to the immediate halving to one million cubic metres a day of gas exports to the West via Belarus and Poland and a hefty rise in market prices.
Several media reports in Russia noted at the time how the unexplained blaze was “good for Gazprom”, suiting its objectives.
It would allow the energy behemoth to “inflate fuel prices in Europe even more”. How convenient.
Putin and his security chiefs appear to be taking advantage of the transition of power in Germany, the end of the pandemic and a low period in wind-generated power and meagre gas stocks across Europe, to seize a geopolitical win.
Putin who is seen with Gazprom chiefs
This is without using any of the array of state-of-the-art hypersonic weaponry his forces have been testing all summer.
He could, at a stroke, turn on the gas taps, not least via an established pipe running across Ukraine.
But as he languishes in self-isolation – probably at his favoured retreat in Sochi beside the Black Sea – with Covid-19 said to have suddenly run riot through his Kremlin entourage posing a threat, the strongman, who will be 69 next month, is in no hurry.
He eyes the rapid opening of the delayed Nord Stream 2 pipeline, which goes nowhere near Ukraine – so undermining and punishing a country that has for now chosen to align with the West.
It will also allow him to supply the giant German market directly with a line under the Baltic Sea.
Putin will use this to boost future exports at higher prices in exchange for stability.
In the meantime it will drive a wedge between the Nato allies who are nervous about Germany’s direct dealing with the Kremlin and making Europe ever more dependent on Russian energy – a deep concern in Washington.
Nord Stream 2 pipeline, gas supplier to Europe
This, in turn, will be used as a stick to demand less Western “interference” in a modern-day Russia where political opposition to Putin has been emasculated.
And, as we saw in this week’s parliamentary elections from a succession of polling station videos, rigging is de rigueur.
As his spokesman Dmitry Peskov has made clear, there is a way out of the messy gas impasse. He explained: “Without a doubt, the fastest possible commissioning of Nord Stream 2 will significantly balance price parameters for natural gas in Europe.”
In other words, follow Putin’s playbook and all will go back to being well. The gas flames will flicker again.
Politicians in Britain and the EU will have to decide how far they go, especially in the face of public concern over shortages and rising prices, in succumbing to the Kremlin.
This is when alternative energy sources may not be ready for some time and they need urgently to keep people warm and reignite their economies after Covid.
US Republican senator John Barrasso warned this week: “We know Russia uses energy to coerce, to manipulate. They use it as a geopolitical weapon. They coerce and manipulate our allies and our partners in Europe.
Putin onboard the vessel to work on the Turkish Stream gas pipeline
“Many of our Nato allies, Germany in particular, are becoming dependent upon and addicted to Russian gas.”
Mr Barrasso says Nord Stream 2 “makes Europe more energy dependent on Russia and of course more prone to Russian influence”.
He adds: “At the same time it’s going to further fuel Russian aggression, Russian intimidation, and Russian instability across Europe.”
For him, Nord Stream 2 “would mean a massive money transfer from our Nato allies straight into the Kremlin’s coffers” and its “destabilising activities”.
There is another side to the dispute, though. The breakdown in East-West relations, which shows no sign of abating and is now mired in sanctions and ever-more lurid rhetoric on both sides, has stopped the prospect of finding mutually beneficial solutions, as both sides resort to penalties and barriers.
But has the pendulum swung too far? The gas crisis could act as the spark to finding a hard-headed solution that both guarantees supplies over the medium term until new energies are available and gives a fair price to Russia, especially if the West acts in unison to buy in bulk.
There is a sense that neither side wins from a long-term stand off.
A political Cold War between Russia and the West looks inevitable while Putin remains in the Kremlin – but it need not mean that people are left shivering this winter.