The gas “wars” that drive prices up

To increase the tensions on gas prices there is not only global demand which, thanks to the post-Covid global recovery, exceeds supply and is creating the so-called ‘energy crunch’. A not insignificant contribution to the rise in prices comes from geopolitical factors, from those areas of crisis, those hotbeds that make methane flows more difficult.

The gas dispute between Morocco and Algeria

The latest crisis in chronological order is the one between Algeria e Morocco. Algiers announced that to leave from 1 November, gas supplies to Morocco will cease through the pipeline Europa-Maghreb. Algeria is now looking to continue its gas supplies to the Spain through an alternative route bypassing Morocco. Same dynamic as what has been happening for several years between Moscow and Kiev.

Algeria will likely divert direct gas to the Spanish market in the pipeline Medgaz, an alternative line that passes under the Mediterranean and connects directly Algeria and Spain. Algeria is Spain’s main gas supplier, with a share of around 30% of total gas.

The Algerian decision to interrupt gas supplies to Morocco is part of the tensions between the two North African countries, which worsened after Algiers unilaterally cut its ties with Rabat at the end of August.

Moldova asks Poland for help

Another center of recent geopolitical stress is the one between Moldova and Russia. It is known how Moscow through energy tries to tighten its grip on some countries that are part of the former Soviet Union. To ease this dependence, Chisinau bought one million cubic meters of natural gas from Poland in an attempt to diversify your sources of supply.

Last week, Parliament declared a state of emergency after negotiations with Russia stalled to renew its long-term contracts. Moldovan Deputy Prime Minister Andrei Sinu said Moldova will ask Moscow for a “fair price” for the new supplies. The contract between Chisinau and Gazprom expired at the end of September and the two sides have not yet reached an agreement.

Gazprom has made it known that it will suspend supplies if all the previous one is not liquidated and a new contract will not be signed by December.

Turkstream did not solve Ankara’s problems

The Turkstream had to solve the energy problems of the Turkey But this did not happen. After the pipeline’s operations started, which took place on January 8, 2020 – which in fact took the place of the South Stream – the Turkish government thought it had taken out some kind of insurance.

But the increase in gas prices and the expiration of some long-term contracts, always with the Russia, is also putting Turkish consumers in difficulty. Already last summer the country had been in difficulty due to the country’s strong dependence on hydroelectric generation.

Due to the extreme heat, the dams stopped working in order not to consume water supplies and the country has since had great difficulty in meeting the energy demand.

The mother of all tensions, the Russia-Ukraine war

We arrive at the main issue, the biggest: the gas war between Russia and Ukraine. The one between Kiev and Moscow is an ancient story of antagonism, political rather than energetic. The last chapter represents the Nord Stream2 or rather the expansion of the first pipeline that brings methane from Russia to Ukraine. The project was born precisely to bypass Ukraine and get Russian gas to Europe without many problems.

Many opponents to the project. First of all, the Ukrainian president, Volodymyr Zelensky, which last April defined the pipeline as a weapon against Kiev. In addition to Ukraine, a number of other countries also struggled with the second line of supply. These include Poland and all the Baltic states which, among other things, fear that they will lose revenue from Russian gas transit rights due to the direct connection between Moscow and Berlin.

Ma the main opponent of the pipeline is the United States, which have always defined the Nord Stream 2 as a “bad deal” for Europe. Beyond the geopolitical motivations, there are also trade issues for Washington. In fact, the US hoped to replace Russia as the preferred gas supplier with their loads of LNG.

The intention remained that way.

Europe in search of ’emancipation’

With the green transition Europe would like to ’emancipate’ itself from dependence on Moscow but the facts are leading the Old Continent in the opposite direction. European dependence on Russian gas has never decreased and after Nord Stream (inaugurated by German Chancellor Angela Merkel on 8 November 2011), the Nord Stream 2 it will make it even tighter.

Once the taps are open, Russia will be able to double supplies to Europe, bringing them to 110 billion cubic meters per year. And it seems very difficult that the German Greens, working to give life to the new government with Liberals and SPD, will keep their promises in the election campaign to block the infrastructure for strategic but also environmental reasons. The market – which translates into Europe’s growing demand for gas in this case – will probably prevail over politics.

By Editor

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