Relations between the European Union and Russia tend to see-saw, with
neither side able to maintain its dominance for long. Where natural gas
is concerned, the past few years have seen Gazprom on its back foot.
The European Commission’s probe into Gazprom’s oil indexed contracts, its insistence on the move from border toward hub trading, and the compulsory unbundling of supply from transportation affecting Gazprom’s joint ventures in Europe were all furiously challenged by the Kremlin, but so far with no effect.
As the new year gets under way, though, the picture is looking very different, with Russia winning on several fronts.
First, what promised to be a major coup for the European Union–wooing Ukraine away from the Kremlin’s sphere of influence–turned sour in the closing days of 2013, as Moscow eased Kiev’s main gripe: high natural gas prices.
While protesters were camping out in Independence Square, calling for closer ties with the EU and ultimately visa-free travel to new labor markets, their president, Victor Yanukovich, was unable to ignore the lure of cut-price gas and the prospect of even bigger riots, such as those in the failed Eurozone states. He signed up to what Moscow was offering instead, and explicitly conceded that his country’s goal of diversification of gas supplies was less important than securing cheap gas.
Russia won a second victory en passant, so to speak, by getting the better of one of its customers, Germany’s RWE.
Read more: Russia is starting 2014 in a strong natural gas position « The Barrel Blog
The European Commission’s probe into Gazprom’s oil indexed contracts, its insistence on the move from border toward hub trading, and the compulsory unbundling of supply from transportation affecting Gazprom’s joint ventures in Europe were all furiously challenged by the Kremlin, but so far with no effect.
As the new year gets under way, though, the picture is looking very different, with Russia winning on several fronts.
First, what promised to be a major coup for the European Union–wooing Ukraine away from the Kremlin’s sphere of influence–turned sour in the closing days of 2013, as Moscow eased Kiev’s main gripe: high natural gas prices.
While protesters were camping out in Independence Square, calling for closer ties with the EU and ultimately visa-free travel to new labor markets, their president, Victor Yanukovich, was unable to ignore the lure of cut-price gas and the prospect of even bigger riots, such as those in the failed Eurozone states. He signed up to what Moscow was offering instead, and explicitly conceded that his country’s goal of diversification of gas supplies was less important than securing cheap gas.
Russia won a second victory en passant, so to speak, by getting the better of one of its customers, Germany’s RWE.
Read more: Russia is starting 2014 in a strong natural gas position « The Barrel Blog
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