US blame Russia for manipulating Europe gas prices, Moscow retorts the EU messed it up

File photo. US Secretary of Energy Jennifer Granholm participates in a news conference on 11 May 2021. [Pool/EPA/EFE]

A US official on Wednesday (22 September) warned against “manipulation” of gas prices in Europe, as a group of European MEPs accused Russia of being behind price rises. In return, Russia said the disbalance was a result of mistaken EU policy making.

“The US has been clear that we and our partners have to be prepared to continue to stand up when there are players who may be manipulating supply in order to benefit themselves,” US Energy Secretary Jennifer Granholm said in an online briefing during a visit to Warsaw.

“We want to all have our eye on the issue of any manipulation of gas prices by hoarding or the failure to produce adequate supply,” she told reporters.

“We are looking at this very seriously and we are united with our European allies in making sure you get adequate, affordable gas supply this winter,” she added.

The looming energy crisis facing Europe overshadowed a meeting of EU ministers on Wednesday, with participants describing the situation – being felt globally – as “critical”. The gas market chaos, which has driven prices 280% higher in Europe this year is being blamed on a range of factors from low storage levels to restrained Russian supplies.

EU energy ministers meet to discuss power price surge

Energy ministers from European Union countries will on Wednesday (22 September) discuss the soaring price of gas and electricity across Europe, as some governments draw up measures to protect their consumers.

The continent faces soaring power prices as its economy recovers from the Covid pandemic and as winter approaches while natural gas reserves are at a worrying low level.

A profound EU transformation towards a low-carbon future, phasing out fossil fuels, is adding to the pressure on the bloc’s market and households.

A group of more than 40 members of the European Parliament has written a letter accusing Russia’s Gazprom of manipulating gas prices.

They see a diminishing flow of Russian gas through Ukraine as an attempt by Moscow to force Germany to approve activation of a newly completed gas pipeline through the Baltic Sea, Nord Stream 2. Gazprom denies the accusation.

IEA says Russia could do more to supply Europe with gas

The International Energy Agency (IEA) said on Tuesday (21 September) Russia could do more to help alleviate gas supply issues in Europe which have driven prices up to record highs over the past month.

While the EU is struggling, the situation is far worse in former EU member Britain, where wholesale energy prices are outstripping even those soaring in the rest of Europe.

The United States is also seeing an increase in energy prices but is largely shielded because of gas production from its shale fields.

The Russian position

Trade on the spot market is behind the surge in natural gas prices in Europe, a Kremlin spokesman said on Wednesday, reiterating that Russian state energy giant Gazprom is sticking to its contractual obligations in full.

The Kremlin spokesman, Dmitry Peskov, dismissed allegations that Moscow could be partly blamed for soaring gas bills in Europe.

“They (Europe) prefer to focus on spot supplies, on the spot market. It is exactly the spot market that leads to such jumps, like this rampant price rise,” Peskov told a daily conference call with reporters.

Russian gas giant Gazprom has been unwilling to shift the gas price-making mechanism to the spot market, preferring long-term gas contracts, once its backbone of gas sales to Europe.

The Kremlin spokesman said state-controlled Gazprom is a reliable gas supplier to Europe.

“Our company and Russia fulfil contractual obligations to European consumers by 100% and even more,” he said.

“Moreover, as far as we know, we are close to historical peaks of gas volumes supplied to European buyers.”

Peskov also said that Russian gas supplies to Europe through Ukraine after 2024, when the current transit deal expires, depend on gas demand.

Germany has four months to certify Nord Stream 2 pipeline

Germany’s energy regulator on Monday (13 September) said it had four months to complete a certification of the Nord Stream 2 gas pipeline after receiving all necessary documents for an application for an operating licence from the pipeline company.

(Edited by Georgi Gotev)

Subscribe to our newsletters