Europe On High Alert: July Shutdown Of Nord Stream Pipeline Has The EU Worried
It’s a dynamic which some in the alternative media have been warning about for months – While the establishment claimed that Russia would be crushed under the weight of NATO sanctions, others have suggested that Russia could hurt the west more (specifically Europe) by implementing sanctions of their own. While mainstream governments and journalists argued about how fast NATO should implement restrictions on Russian oil and gas, none of them seemed to consider the possibility that Putin would cut off energy exports himself.
This is the problem with instituting foreign policy and engaging in geopolitics using a “cancel culture” mentality; it leads to childish thinking and a lack of foresight. You can’t “cancel” a nation if you are dependent on them for 40% of your energy needs.
Anyone with moderate industry knowledge in oil and gas could have seen this coming. Europe is now on “high alert” as the Nordtream 1 pipeline to Germany has lost 60% of its natural gas transfers as Russia pressures Canada for the return of a massive turbine being held in Canada for repairs. Canada has lifted sanctions in response and allowed the shipment of the turbine back to Russia, showing that the Kremlin does indeed have economic leverage over NATO countries.
Even more concerning is that the pipeline will be undergoing an extended shutdown due to “maintenance” until July 21st. Some officials in Europe believe this shutdown may be a precursor (a beta test) to a total block of Russian gas to the EU, and they are probably right.
Speaking at the economic forum Les Rencontres Économiques, French Minister Bruno Le Maire said: ‘Let’s get ready for a total shutdown of the Russian gas supply…This is the most likely event.’ He added ‘We should not take Vladimir Putin’s threats lightly.’
It’s important to remember that Europe is not only dependent on oil and gas imports for heating, it is also dependent on them for electricity and many other needs. The middle of summer does not seem like the worst time to face heating shortages, but the overall effect of energy loss would drag the EU economy down into panic. Will the gas supply return after July 21? Probably, but this shutdown indicates that the Kremlin may be sending a message that they could end Europe’s economic stability anytime they want.
The closer we get to winter, the more pressure will be applied, no doubt.
The US is far less dependent on Russian energy resources, but there is the greater problem of a “shrinking energy pie” to consider. With Europe cut off, they will be scrambling (as they already are) to find replacement imports from alternative sources. This means less oil and gas on the overall global market and even more price inflation for everyone, including Americans.
The Ukrainian government has chimed in on the scenario, arguing that Putin is “bluffing.” However, if we look at recent developments in terms of Russia’s trading partners, this sounds like political spin. Both China and India have greatly increased their purchases of Russian oil over the past few months and Russia’s oil revenues have soared despite western sanctions. Russian natural gas exports to China jumped 60% in May. This shift in trade is part of a 30 year energy deal signed with China in February before the Ukraine war even began, indicating well planned contingencies on the part of the Kremlin.
Russia’s economic backing from its trade partners was solidified at the recent BRICS summit, where nations like China and India showed full support and offered only passing interest in Ukraine. With The BRICS representing well over 30% of the human population and China representing the largest importer exporter economy in the world today, Russia is not facing any shortage of export alternatives. It is highly unlikely that they are bluffing when it comes to cutting off energy to Europe.
If this does happen for any length of time during winter, prepare for a considerable reduction in living standards in the EU as energy inflation buries their economy and creates the potential for civil unrest. In the US, prepare for even higher prices in terms of oil and gas as Europe gobbles up whatever energy exports they can find on the market to replace Russian losses.
Tue, 07/12/2022 – 02:45