EU to probe Gazprom’s role in energy crisis

With excessive vitality costs hurting shoppers in Europe, the European Commission is at present wanting into all allegations of doable anti-competitive conduct by firms producing and supplying pure gasoline to Europe with a view to verifying whether or not the present state of affairs on the wholesale gasoline markets in Europe could be attributed to industrial conduct by market members, a spokesperson for Competition Commissioner Margrethe Vestager instructed New Europe on January 14.

A day earlier, Vestager instructed a press convention its unusual that Gazprom is proscribing provide into gasoline storage services at a time of elevated demand. “We are looking into this as a priority because it is thought provoking that a company in view of increasing demand limits supply. That is quite rare behavior in the marketplace,” she mentioned in the course of the Q&A session of the press convention.

“We have sent out questionnaires to a number of energy providers in this field. We have got a lot of responses, but we are still waiting for responses among others from Gazprom. And of course, we are eagerly awaiting the information from them in order to advance our analysis because the question of energy prices is very high priority. It is high priority I think in every household in Europe because they see their energy bills going up so for member states, for the Commission, this is very high priority. So, of course, we are eagerly waiting the information in order to be able to do our job,” Vestager mentioned.

The EU spokesperson defined {that a} breach of the EU competitors guidelines can solely be discovered if there’s proof demonstrating the existence of an settlement or concerted apply that restricts competitors (Article 101 TFEU) or abusive conduct by an organization holding a dominant place available on the market involved (Article 102 TFEU).

“While EU competition law, in principle, does not allow for intervention aimed at generally increasing supply or decreasing wholesale prices of natural gas, it can address possible distortions of competition by companies active in European gas markets in order to restore competitive market conditions,” the EU spokesperson mentioned, including that this in flip may help guarantee dependable and sustainable provide of vitality at inexpensive costs.

Russia hopes the gasoline disaster and worth spikes seen in Europe this 12 months, and the inevitability of excessive costs this winter, will assure that the controversial Nord Stream 2 pipeline from Russia to Germany can be authorized by Germany and the EU and grow to be operational in 2022.

The US and a few European international locations oppose the venture. The US Senate on January 13 didn’t move a invoice to slap sanctions on Nord Stream 2 sponsored by Republican Senator Ted Cruz, Reuters reported, noting that, a day earlier, Senator Robert Menendez, Chairman of the Senate Foreign Relations Committee, gained the help of a lot of his fellow Democrats, together with President Joe Biden, for an alternate invoice he launched.

Katja Yafimava, a senior analysis fellow on the Oxford Institute for Energy Studies, defined that the Cruz invoice mandates unconditional sanctions on Nord Stream 2 and seeks to revoke Biden’s proper to situation waivers with out Congress approval.

“There is also a bill by Menendez under consideration which envisages sanctions on entities/individuals involved in planning, construction and operation of Nord Stream 2 if there is a military escalation in Ukraine. If there were to be a vote on this bill and if it is voted in, then in the event of military escalation and subject to Secretary of State assessment the May 2019 Nord Stream 2 sanctions waiver could be rescinded and sanctions could be imposed,” Yafimava instructed New Europe.

She famous that, though the EU and Germany have all the time been in opposition to US sanctions on Nord Stream 2, viewing them as violation of their sovereignty, navy escalation would make it harder for them to protest in opposition to US sanctions, particularly because the July 2021 US-German settlement acknowledged that ought to Russia “commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector, including gas”.

According to the Oxford knowledgeable, ought to there be a navy escalation in Ukraine, one might see joint European and US sanctions on Nord Stream 2 thus delaying flows by way of the gasoline pipeline from Russia to Germany. “But under this scenario, the flows via Ukraine would be endangered too, thus leaving Europe, already more than half-way through its gas storages and exuberant prices, in a bind,” Yafimava mentioned. “To avoid this, one needs to see genuine progress on the implementation of Minsk 2 agreements by Ukraine – and Europe urgently needs to make a serious effort to convince Ukraine to do so, as any such progress would significantly reduce the risk of military escalation, which is good for Ukraine’s security, thus also reducing the likelihood of sanctions, which is good for Europe’s gas supply security. With the risk of escalation reduced I would expect Nord Stream to be certified and start flowing gas in 2022,” Yafimava added.

Igor Mantsurov, director of Scientific Research for the Institute of Economics in Kiev, Ukraine, instructed New Europe he believes that delay of the Nord Stream 2 operations is tactical and short-term, “It is a part of common EU-US strategy to force Gazprom to signing new agreement with Ukraine. But considering natural gas prices $1,500-2,000 per 1,000 cubic meters Europe won’t hold for a long time,” Mantsurov argued and added, “Moscow has additional argument of 100,000 troops on Ukraine’s border but has more political character”.

follow on twitter @energyinsider

Source link

Back to top button