Don’t Blame Russia for High Gas Prices

Amur gas plant Svobodny Russia
Gazprom workers at the Amur natural gas plant outside Svobodny, Russia, June 9, 2021 (Gazprom)

The price of natural gas is skyrocketing. In the United States, it’s up 100 percent from a year ago. In parts of Europe, 500 percent. Japan and Korea are paying record prices for liquified natural gas imports.

Nick Ottens explained the reasons behind this surge here. I will focus on one: Russia’s role.

Russia has been accused of market manipulation by various countries: forcing the price of gas up in order to accelerate the completion of Nord Stream 2. This accusation is unsurprising, given the history of price and supply disputes between Europe and Russia.

But it is wrong. Read more “Don’t Blame Russia for High Gas Prices”

Belarus’ Lukashenko Under Pressure from All Sides

Mike Pompeo Alexander Lukashenko
American secretary of state Mike Pompeo meets with President Alexander Lukashenko and other Belarusian officials in Minsk, February 1 (State Department/Ron Przysucha)

Belarus’ Alexander Lukashenko has been in power for 26 years. He is expected to win what will likely be a rigged election on Sunday, but he may not get a landslide this time. The cracks in his regime are widening. Read more “Belarus’ Lukashenko Under Pressure from All Sides”

Sino-American Rift Gives Russia an Opening

Vladimir Putin Xi Jinping
Presidents Vladimir Putin of Russia and Xi Jinping of China meet in Benaulim, India, October 15, 2016 (Kremlin)

Aside from causing a global humanitarian crisis, COVID-19 has deepened the rift between China and the United States. President Donald Trump has politicized the pandemic, calling it the “Chinese virus” and ordering the federal government’s main pension fund to stop investing in China.

Military conflict remains unlikely. Escalation is more likely to be economic and political — which is still costly, and gives America’s other nuclear-powered adversary, Russia, a chance to strengthen its ties with Beijing. Read more “Sino-American Rift Gives Russia an Opening”

Why Kosovo Is Lifting, But Will Likely Reinstate, Tariffs on Serbia

Kosovo’s new prime minister, Albin Kurti, is partially lifting his predecessor’s 100 percent import tariff on Serbian goods. He has offered to lift the tariff completely if Serbia suspends its derecognition campaign. If it fails to reciprocate, the tariffs will be restored in June.

Since reciprocation would imply Serbian recognition of Kosovo’s independence, it seems inevitable the trade sanctions will be back soon. Read more “Why Kosovo Is Lifting, But Will Likely Reinstate, Tariffs on Serbia”

Macron’s Idealistic Russia Pragmatism

Sebastian Kurz Emmanuel Macron
Austrian chancellor Sebastian Kurz and French president Emmanuel Macron speak on the sidelines of a summit in Brussels, April 10, 2019 (BKA/Arno Melicharek)

The 2020 Munich Security Conference saw French president Emmanuel Macron reaffirm his eagerness to turn Russia into a security partner, suggesting that “we have to restart a strategic dialogue.”

But Russia hasn’t been a part of Europe for a while and doesn’t belong in a conversation about European autonomy. The only thing that ties it to Europe is geography. Read more “Macron’s Idealistic Russia Pragmatism”

In Minsk, Pompeo Is All Talk

Mike Pompeo Alexander Lukashenko
American secretary of state Mike Pompeo meets with President Alexander Lukashenko and other Belarusian officials in Minsk, February 1 (State Department/Ron Przysucha)

Tensions between Belarus and Russia prompted American secretary of state Mike Pompeo to pay Alexander Lukashenko a visit this weekend. He told the Belarusian leader that the United States could fulfill all of his country’s oil needs if he wants to become “independent” from Russia.

This shouldn’t be taken seriously. Besides the hypocrisy — how “independent” would Belarus be if it traded its dependence on Russia for a dependence on the United States? — it would be logistically and financially almost impossible for America to meet the complete oil needs of Russia’s closest ally.

Pompeo’s remarks do suggest America is willing to help Belarus from being absorbed by Russia. But how much can it really do? Read more “In Minsk, Pompeo Is All Talk”

Germany Invests in Rail, But Is It Enough?

Cologne Germany train station
Central train station of Cologne, Germany (Unsplash/Kai Pilger)

Germany is investing €86 billion over the next ten years in its aging rail network. The hope is to shift Germans toward less carbon-intensive forms of travel.

The federal government will cover the bulk of the cost, €62 billion. Deutsche Bahn, the state-owned railway company, will pay the remaining €24 billion. The money will be used to update tracks, stations, signal boxes and energy supply systems.

The government also intends to cut fares by 10 percent for trips of 50 kilometers or more in order to incentivize the use of trains for long-distance travel.

With this package, Germany kills two birds with one stone: it modernizes its infrastructure while reducing carbon emissions.

It also demonstrates Germany’s willingness to spend. Read more “Germany Invests in Rail, But Is It Enough?”

Russian-Ukrainian Gas Deal Is a Trilateral Victory

Kiev Ukraine
Skyline of Kiev, Ukraine, January 15, 2015 (Sergey Galyonkin)

Russia and Ukraine have agreed to secure the flow of natural gas into Europe for the next five years. A deal between the two countries satisfies the economic needs of all three parties involved. Russia guarantees the export of its gas, Ukraine continues to benefit financially from transiting the gas, and the EU receives a steady supply of gas for the immediate future.

Gazprom, the Russian gas monopoly, will pipe 65 billion cubic metres of gas into Europe in 2020. The amount will fall to 40 billion over the next four years. The agreement mentions the possibility of extending the contract by another ten years upon maturity.

Ukraine will receive up to $7 billion in transit fees, which would be around 5 percent of its national budget.

An agreement has not (yet) been reached on direct gas supplies to Ukraine. For the time being, it only stands to benefit financially.

Naftogaz, the Ukrainian gas company, will also receive $2.9 billion from Gazprom in overdue transit payments following an arbitration court ruling in Sweden. In return, Ukraine has agreed to drop $12.2 billion in additional legal claims. Read more “Russian-Ukrainian Gas Deal Is a Trilateral Victory”