Gazprom warns Europe of gas shortage without increased Russian imports

Gazprom Neft CEO Alexander Dyukov attends a session during the Week of Russian Business in Moscow. (Reuters)
Updated 09 February 2018
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Gazprom warns Europe of gas shortage without increased Russian imports

LONDON: Europe will soon experience a gas shortage and price spike if it tries to rely on US gas imports to cover rising demand instead of increasing purchases from Russia, Kremlin energy giant Gazprom told Reuters.
The Trump administration has said it intends to level the playing field in energy markets by offering US gas to Europe and Asia, citing a need to reduce what it calls the market-distorting power of actors such as Russia and OPEC.
Russian gas supplies to Europe have become increasingly politicized since Moscow cut supplies to Ukraine in the last decade amid pricing disputes and after Russia annexed Crimea from Ukraine in 2014.
The West has accused Russia of using gas as a political weapon. Moscow has responded by blaming the West for blocking its new pipeline projects for political rather than economic reasons.
The warning about a possible supply crunch comes as Gazprom prepares to start large-scale deliveries to China in a move reminiscent of Russia’s oil strategy, under which Moscow became a major supplier to Beijing at the expense of Europe.
Gazprom’s deputy head Alexander Medvedev said the company would have enough supplies for both Europe and Asia but that it was time for Europe to decide from where it should source gas.
“Europe completely miscalculated when they assumed that they won’t need much additional gas and if they need some it can be supplied from outside Russia,” Medvedev, who looks after exports for the world’s top gas producer and exporter, said.
Gazprom’s exports jumped 8 percent last year to an all-time high of 194 billion cubic meters on higher demand and lower prices, giving it a record share in Europe of 35 percent.
Medvedev said the share could rise above 40 percent over time as Europe’s gas demand rises, production in the Netherlands and Britain falls and Norway’s output growth should slow after 2025. US supplies will remain modest, expensive and would mainly go to Asia.
“Many serious analysts will come up with a model for you showing that Europe will soon face a major gas crunch and, what is worse — a steep rise in prices,” Medvedev said.
“Regarding calls about the need to cut reliance on Russian gas, should we in Russia be speaking about an over-reliance on money from one continent? Like from the dollar or euro? What it all means in fact is that we are mutually dependent.”
Gazprom will begin pipeline supplies to China next year. The company wants to take at least a one-tenth market share there by 2025, when it builds another major route.
“We can supply as much gas as needed to Europe even though we are entering a new market in China. But Europe needs to decide now. They need to start thinking right now about who will cover additional demand after 2025. Unfortunately there is no energy dialogue between Russia and the EU,” Medvedev said.


Stocks slide as Wall Street fears worsening US-China trade spat

Updated 18 June 2018
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Stocks slide as Wall Street fears worsening US-China trade spat

NEW YORK: Wall Street was sharply lower at the open on Monday as the spiraling trade dispute between Beijing and Washington weighed on global stocks.
China on Friday vowed to slap tariffs on up to $50 billion in US imports, including crude oil, retaliating like-for-like against US tariffs on Chinese goods announced the same day by President Donald Trump.
Ten minutes into the day’s trading, the benchmark Dow Jones Industrial Average was about a full percentage point down at 24,841.95, putting the index on track for a five-day losing streak.
Meanwhile the broader S&P 500 and tech-heavy Nasdaq had both fallen 0.8 percent to 2,758.57 and 7,681.37 respectively.
Aircraft giant Boeing was down 0.7 percent and heavy equipment manufacturer Caterpillar had slumped 1.7 percent. Both are Dow components seen as exposed to foreign trade.
Patrick O’Hare of Briefing.com said trade worries had in recent days tended to spark lower opens, with stocks recovering somewhat during the day as investors gained their footing, as happened Friday.
However, Friday saw additional buying as many stock options expired that day, providing support that the markets would likely do without on Monday.
Perhaps “today is the market’s true self following a weekend of reflection on some clearly negative trade headlines,” he wrote.
Oil prices were holding steady in New York following China’s tariff decision and ahead of Friday’s meeting of the Organization of the Petroleum Exporting Countries, which is due to address market supply.
US media giant Disney had fallen 1.5 percent after analysts downgraded the company to “sell” on fears that a bidding war it is fighting with Comcast for the assets of 21st Century Fox would leave Disney in a lose-lose situation: pay too much or fail to capture needed new business.
Shares in Chinese e-retailer JD.Com jumped 2.3% following news that Google parent Alphabet had invested $550 million in the company.