The announcement by Russian President Vladimir Putin to guarantee gas supplies to Europe hides the dark intention to accelerate the commissioning of the Gazprom pipeline, which is to supply Russian gas to Germany. Experts doubt Russia's ability to increase its production to meet domestic and European demand without the launch of Nord Stream 2.
The energy peace has been short-lived. The price of natural gas futures contracts in Europe is once again above 100 dollars. The balm offered by Putin has disappeared in two days. The most repeated word among experts is blackmail to describe the Russian president's announcement. All eyes are on the start-up of the Nord Stream 2 pipeline, which was recently completed and still needs the approval of the regulators before it can be put into operation.
Putin's offer is nothing more than a big bluff, considering that Russia's capacity to supply European and its own demand is limited. "The Russian domestic gas market is also very tight, with inventories low, production near its peak and winter just around the corner, which limits gas export capacity," explains Adeline Van Houtte, Europe analyst at the Economist Intelligence Unit.
I don't think Gazprom can deliver more than 190 billion cubic meters of gas to Europe this year and there is little sign that the company has increased deliveries," the expert insists. The Russian state-owned company is one of the main suppliers of gas to Europe, accounting for 35% of consumption.
The International Energy Agency put the spotlight of the European gas crisis on Russia. Yesterday the top executive Fatih Birol assured that it could increase exports to Europe by 15% for the winter. Mike Fulwood, a senior research fellow at the Oxford Institute for Energy Studies, expressed doubts on CNBC that Russia will also be able to supply more gas to Europe, noting that production is already at record levels.
"Russia has faced the same demand pressures as Europe," he explained. "Last year Russia experienced a very cold winter and needs to replenish its own reserves," says the expert. For Fulwood, neither the entry into play of Nord Stream 2 would solve the problem.
But experts do point to the controversial infrastructure and the approval of European regulators as the main reason for Putin's bluffing. A month ago Gazprom laid the last piece of the pipeline, but there is still a long legal road ahead before it can begin operating. Denmark has already given the go-ahead, but the Bundesnetzagentur, Germany's energy regulator, may take months.