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Russia “took advantage” of Europe’s energy crisis


Russia did not cause Europe’s energy crisis – but it did not help, instead it tried to benefit from the situation, said Amos Hochstein, senior advisor at the US State Department for global energy security.

“It certainly didn’t do anything to alleviate it [the energy crunch], and actually took advantage of it, “Hochstein told CNBC’s Hadley Gamble on Wednesday.

Russia decided not to send additional supplies of natural gas to Europe in November, although it agreed to help, as the auction results in October showed.

Gas prices in Europe hit record highs in October due to rising demand, lower than usual inventory levels and limited supply.

Russia started pumping less gas to Europe in August, and some analysts suggested the country is limiting its discretionary supply to support the case for the controversial Nord Stream 2 pipeline, which will bypass Ukraine and Poland to get gas from Russia to Germany.

The pipeline is awaiting approval from German regulators, but has met with opposition for a variety of reasons, including concerns that Nord Stream 2 is inconsistent with European climate goals.

On the geopolitical front, Washington fears that Nord Stream 2 is giving Moscow too much power over Europe’s gas supplies. In 2020 around 43% of European gas imports came from Russia.

Kiev, meanwhile, fears that Russia will bypass Ukraine and take away the gas revenue.

Energy as a weapon?

Hochstein said Moscow is close to turning energy into weapons.

“You have come very close to the line of using it as a weapon by suggesting that if a political decision were made in Germany … from gas from Russia to Europe,” said Hochstein.

Russian President Vladimir Putin has denied claims that his country is using energy against Europe.

“Even during the toughest phases of the Cold War, Russia has consistently fulfilled its contractual obligations and delivered gas to Europe,” Putin told CNBC in October.

Hochstein said references to contractual amounts are an “excuse” as those values ​​should be “the ground, not a cap” in terms of adequate energy supplies.

The fact that prices have soared to historic highs means demand will not be met and manufacturers should take an offer “beyond contractual obligations” to bring prices down, he said.

He added that Russia, as an energy supplier, has a responsibility to increase supply to help importers maintain normal economic activity so that GDP growth is not hampered by high oil or gas prices.

Russia cannot claim to be a “reliable supplier”, but only adheres to the contractually agreed values, he said.

You broke no laws, Hochstein admitted. But he said Moscow’s energy policy seemed to have “never let a good crisis go to waste”.

“Unfortunately, I think that’s how they behaved,” he said.

– CNBC’s Sam Meredith, Holly Ellyatt, Chloe Taylor and Silvia Amaro contributed to this report.