The energy crisis

A million EU citizens are going to spend the winter in Turkey amid the looming energy crisis in their countries, Yigit Bulut, chief adviser to Turkish President Recep Tayyip Erdogan said, calling on his compatriots to turn the situation to their benefit.

Taking to Twitter last weekend, Bulut said that “at least 1 million EU citizens, whose gas was cut off, took action to spend this winter in Turkey.”

As hotels in major Turkish cities, such as Istanbul, Izmir, and Antalya, will be full this winter, the presidential advisor explained, Europeans will be busy buying or renting houses. Therefore, he called on Turks to make use of a situation that, in his opinion, is a manifestation of “divine justice.”

“Do not sell too cheap, they are in need!” Bulut said.

His remarks came as many European countries are preparing for what the EU’s High Representative for Foreign Affairs Josep Borrell described as “a perfect storm.”

Energy prices and bills have been skyrocketing amid Moscow’s military operation in Ukraine and Western sanctions against Russia. A recent announcement by the Russian energy giant Gazprom that Nord Stream 1, a key gas route from Russia to the EU, would remain shut indefinitely due to sanctions-related maintenance problems drove wholesale gas prices up even further. The looming crisis has prompted many European governments to take emergency measures to cut energy consumption and to warn populations of a difficult winter ahead.

Turkey, which has adopted a neutral position on the Ukraine conflict, has made it clear that it would continue to rely on natural gas from Russia.

www.rt.com/news/562295-turks-crisis-eu-benefit

The upcoming winter may turn out to be a tough one for European states and they themselves are to blame for it, warned Turkish President, Recep Tayyip Erdogan during a press conference in Ankara on Tuesday.

The Turkish leader told journalists that “Europe is reaping what it sows” when it comes to the natural gas shortages plaguing the region and that the countries’ attitude towards Russian President Vladimir Putin and the sweeping sanctions imposed on Moscow are to blame for the current crisis.

“I think that Europe will spend this winter with serious problems. Turkey, at this stage, has no such problems with gas supplies,” Erdogan noted.

Erdogan’s statement comes after Moscow warned of a looming “huge global storm” caused by the “illogical and often absurd” moves by Western nations. In a statement on Monday, the Kremlin noted that the sanctions imposed by the US, EU and other countries on Russia have backfired and resulted in a sweeping energy crisis as well as record inflation across the West.

Natural gas prices jumped a staggering 30% on Monday after Russia’s Nord Stream 1 pipeline failed to resume operations due to sanctions-related maintenance issues. Russia’s energy giant Gazprom, which operates the pipeline, said the gas route would remain shut indefinitely after an inspection found technical problems with the main turbine.

Moscow claims that the only thing preventing the Nord Stream 1 pipeline from working at full capacity are the Western-imposed sanctions, while Gazprom has also warned that the anti-Russian restrictions are hindering regular maintenance on the pipeline’s equipment.

European leaders have been accusing Moscow of using energy supplies as a geopolitical weapon, while German Chancellor Olaf Scholz has stated that Russia can no longer be considered a reliable energy partner.

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Europe is struggling to contain a spiraling energy crisis, one that could lead to rolling blackouts, shattered factories and a deep recession. The primary cause is that Russia has choked off supplies of natural gas that the continent has dependent on for years.

Germany’s largest gas importer – Uniper – is struggling to replace Russian gas supplies and the company’s losses are mounting, its CEO, Klaus-Dieter Maubach, admitted this week. The company could also run out of cash Berlin granted as aid later this month, he warned.

Uniper has had to substitute missing gas volumes (which Moscow blames on technical issues and Western sanctions) by buying gas at high prices on the spot market and selling it to its customers at cheaper, long-term prices. As a result, the company reported a loss of more than €12 billion ($12 billion) – the biggest in German corporate history – as early as July, prompting Berlin to intervene.

The government covered the company’s losses by acquiring a 30% stake in Uniper and provided it with an additional €7.7 billion ($7.7 billion) aid package designed to help it hold out until the fourth quarter of 2022. Now, Uniper admits the aid will not be enough.

The company will hit the financial aid limit “definitely … earlier,” Maubach told journalists on the sidelines of the Gastech conference in Milan. “Most likely we will reach that ceiling in September already,” he added.

The agreement with the government might see the gas giant receiving up to €20 billion to prevent its collapse and a potential domino effect in the national energy sector, according to Bloomberg. In addition, the company had an additional €4 billion loan from the German state bank KfW approved this week on top of the €9 billion credit line it has already used, Germany’s Handelsblatt business daily reported.

The future does not appear bright for the German gas giant despite all the financial assistance, according to Maubach. “I have said this a number of times now over this year and I’m educating also policymakers. Look, the worst is still to come,” he told CNBC in Milan, adding that “what we see on the wholesale market is 20 times the price that we have seen two years ago.”

Natural gas prices in Europe rose 30% on Monday after the announcement that Russia’s Nord Stream 1 pipeline would not resume pumping due to sanctions-related maintenance issues. Russian energy giant Gazprom, which operates the pipeline, said the gas route would remain shut indefinitely. Moscow added that pipeline operations will be hampered as long as Western sanctions remain in place.

The news came amid an ongoing energy crunch in the EU. Since the start of Russia’s military offensive in Ukraine in late February, gas prices have climbed to record highs in Europe. In late July, EU members agreed on a plan to reduce their gas consumption by 15% over the coming months to increase the bloc’s energy security at a time when it seeks to rid itself of its dependence on Russian energy.

www.rt.com/news/562399-germany-gas-giant-state-funding

European Commission President Ursula von der Leyen has asked EU member nations to implement “mandatory” energy rationing policies, calling on the bloc to “flatten the curve” of demand during a Wednesday press conference in language reminiscent of the darkest days of the Covid-19 lockdowns.

“What we have to do is flatten the curve to avoid the peak demands. We will propose a mandatory target for reducing electricity use at peak hours and we will work very closely with the member states to achieve this,” she announced, calling for the rationing measures to be locked in before demand starts to soar in earnest in the winter.

In addition to rationing the existing supply, von der Leyen called for capping profits for energy companies raking in record profits due to market prices, and reinvesting those funds in renewables, which she called “our energy insurance for the future.”

She also pledged to impose a price cap on Russian imports, even while claiming the EU had largely replaced Russian supplies with energy from alternative sources. Russian President Vladimir Putin responded to her speech with a threat to cut off all remaining energy flow to the bloc. “We will not supply gas, oil, coal, heating oil – we will not supply anything,” he said.

Beyond accusing Russia of “actively manipulating the gas market,” von der Leyen blamed “the effects of climate change” for the record-breaking costs of gas and electricity, insisting that it isn’t just Europe that is suffering – there is a “global scarcity of energy” going on.

Von der Leyen is not the first European leader to propose energy rationing as a solution to the largely self-imposed supply crisis triggered by the EU’s efforts to sanction Russia as economic punishment for its military operation in Ukraine. France’s Emmanuel Macron has called for self-limiting energy consumption in order to avoid future rationing, even while hinting at a more permanent state of affairs with his declaration of the “end of abundance.” The Italian and German governments have made similar statements.

Von der Leyen’s repurposing of the emotionally-charged pandemic directive to ‘flatten the curve’ has some worried that the EU and other governments may attempt to bring back other elements of the Covid-19 response in order to address the frustratingly nebulous specter of climate change – specifically through ‘climate lockdowns’, as championed by the World Economic Forum and some environmental advocates for cutting emissions and reducing energy usage.

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Over the past six months, dozens of vessels have made ship-to-ship transfers of oil off the coast of Greece with tankers that left Russia and later arrived at European ports, business daily Nikkei reported on Wednesday. Its analysis showed there was only one such vessel last year.

“Transferring oil between ships at sea to hide its origin may continue even after the oil embargo takes effect,” the newspaper said.

It further revealed that on August 24, it photographed the transfer of oil from one tanker to another in the Laconian Gulf near southern Greece. One tanker reportedly was the Greek-registered Sea Falcon, which left the Port of Ust-Luga in northwestern Russia on August 4. The other was the Indian-flagged Jag Lok, which departed from the Turkish Port of Aliaga, also on August 4. Small boats surrounded the tankers, assisting with the transfer, according to the report.

Over the six months through August 22, Nikkei has confirmed 175 transfers off the Greek coast involving tankers from Russia. There were only nine such transfers during the same period last year, it said. Refinitiv data shows that Russia exported 23.86 million barrels of oil for ship-to-ship transfers off Greece. During the same period last year, 4.34 million barrels were shipped for similar transfers.

Nikkei tracked the routes of the ships, confirming that 89 tankers arrived at ports, compared with only three such arrivals in 2021. Of those, 41 arrived at ports in Greece, Belgium, and elsewhere in Europe, it wrote, noting that two tankers made port calls in Britain.

The analysis highlighted the crucial role that the waters near Greece play as a hub for oil shipments between Russia and Europe.

www.rt.com/business/562510-russian-oil-eu-hidden-routes