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BREST, France — The Kremlin always likes to pretend that gas and politics can be kept apart. But the Europeans aren’t standing for that anymore.
EU Competition Commissioner Margrethe Vestager on Thursday gave the strongest intention to date that Moscow’s gas-export monopoly Gazprom risked another round of antitrust action from Brussels. The normally tight-lipped Dane gave a rare insight into her thinking on what would be a highly politically charged case by implying that Moscow appeared to be manipulating the market as energy prices soar and Russia masses troops on the Ukrainian border.
“It is indeed thought-provoking that a company, in view of increasing demand, limits supply,” she told reporters on Thursday.
“That is quite rare behavior in the marketplace,” she added, explaining that she had already received “a lot of responses” in her probe into Gazprom’s practices.
The Russian company told POLITICO in an email: “We are in contact with the European Commission.”
Another major antitrust case from the EU would be a headache for Russian President Vladimir Putin. Although Gazprom escaped a fine from the European Commission in a legal showdown in 2018, it was forced to make sweeping changes to its divide-and-rule business model and was banned from carving up the market in a way that allowed it to charge wildly divergent prices to European buyers.
In addition to the increased pressure from Europe’s competition enforcers, the EU’s top diplomat Josep Borrell also insisted that Russia’s hopes of piping gas directly into Germany via the Nord Stream 2 pipeline were also dependent on its behavior in Ukraine.
“Certainly the functioning of this infrastructure will also depend on the development of the events in Ukraine and the attitude of Russia,” he said, adding that the future of the pipeline — expected to be approved by German regulators later this year — “is certainly linked to the military situation in Ukraine.”
But if Russia de-escalates, “and nothing happens, then it’s in the hand of the regulator to decide,” he said.
Germany is frantically trying to keep Nord Stream 2 out of discussions on measures to punish Russia in case it attacks; Berlin has long argued that the pipeline is a commercial project that shouldn’t be linked to politics.
“We should not drag [Nord Stream 2] into this conflict,” German Defense Minister Christine Lambrecht said in an interview with the broadcaster rbb ahead of a meeting Thursday and Friday of EU defense and foreign affairs ministers in Brittany.
Gas price suspicions
Seeking to explain the gas price surge, Fatih Birol, head of the International Energy Agency, also pointed the finger at Gazprom on Thursday.
“We see strong elements of ‘artificial tightness’ in European gas markets, which appears to be due to the behavior of Russia’s state-controlled gas supplier.”
Russia said last year that it would boost supplies to Europe once it filled up its own reserves, but that’s not happening. Instead, the Siberia-to-Germany Yamal pipeline has been flowing in reverse from Germany to Poland for more than three weeks.
“This does suggest that, while Gazprom is reportedly writing its nominations from European buyers, it is holding potential spot supplies off the market for either geopolitical or economic (to keep the price high) reasons or a bit of both,” Mike Fulwood, senior research fellow at the Oxford Institute for Energy Studies.
Russia has traditionally tried to insulate its energy exports — it supplies about 40 percent of the EU’s natural gas and has long argued that it’s a stable and predictable provider — from the political pressure it exerts in its neighborhood. But that is becoming more difficult as the US, NATO and the EU became alarmed at the Russian troops gathered around Ukraine and the Kremlin’s strident demands to fundamentally reshape Europe’s security architecture.
The US Senate debated a Republican-led effort on Thursday to hit Nord Stream 2 with sanctions — a measure that failed as US President Joe Biden has tried to push for unity with European allies against Russia’s aggression, in Ukraine and elsewhere.
In response, a large group of Democratic senators unveiled legislation on Wednesday that would impose biting sanctions on Russia — including on Nord Stream 2 — if Moscow invades its neighbor.
US allies, especially those in Central Europe like Poland, see Nord Stream 2 as a Russian geopolitical weapon. Ending gas exports by pipelines running across Ukraine would deprive Kyiv of billions in urgently needed revenues and allow Russia to cut off gas to countries that it sees as problematic while continuing to supply Germany.
“North Stream 2 is an instrument of the influence of Russia on the European security, so we cannot skip this topic in our discussion about security because the threat to our European energy security and stability and the energy blackmail on Ukraine and other countries is a matter of fact,” said Marcin Przydacz, Poland’s deputy foreign minister, adding that energy prices are high “mostly because of the Russian policy.”
Suzanne Lynch contributed reporting.
This article has been updated with the Republican measures failing.
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