The Iron (Pipeline) Curtain

Stephen Fidler at the Wall Street Journal has an interesting piece running today about the annual winter pipeline politics (though the sensible agreement yesterday in Yalta may diminish a lot of fears).  There are some interesting facts and numbers in the piece - for example the estimate that Gazprom's contract prices are sitting around $10 per million BTU, while LNG can be had on the spot market for $4 per million BTU.  In a refreshing change of pace, we see Fidler point more of the blame at the national champions E.ON and ENI if by chance Eastern European households go cold this winter.  From a business perspective, a supply cut-off would really hurt Gazprom and benefit the state-corporate avarice of Western Europe (who have the ability to import from alternative sources).

Either way, things are looking bad for everybody caught in Russia's newly declared sphere of influence.

How long this new iron curtain will last depends in part on how soon the EU can get its act together to push forward a single market in an environment where, as one senior EU adviser said this week, the bloc "doesn't address this with a strategic view."

A reason for that, said Charles Grant of the Centre for European Reform, is that "national energy champions" -- by which he means the likes of Eni and E.On -- have persuaded national governments to keep the European markets segregated.

Gazprom can help accelerate the progress to a single market by continuing to cut off gas supplies to paying customers. For lots of reasons, therefore, another bitter Russia-Ukraine gas dispute is the last thing Gazprom, as a business, needs.

Gazprom, though, is more than a business. It is also an arm of Russian foreign policy.

No TrackBacks

TrackBack URL: http://www.robertamsterdam.com/cgi-bin/mt4/mt-t.cgi/18414

1 Comments

Journalists definitively lack of historical culture !
It was Mr Reagan who was speaking of the Druzjba pipe as " an iron rope which with Europeans will hang themselves " and not as the " iron curtain " !


Watch Us

Follow Us

facebook.jpg
twitter.jpg


About this Blog

This blog was created to express views which may stimulate debate and discussion on topics of international interest. I believe that we live in a world of unchallenged impunity, and this blog is ...

Continue reading...

My Firm

Blogs

Singapore White Paper

Official Khodorkovsky Trial Website