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month. Freeport LNG, one of the largest sources of US LNG exports, is due to remain shut for three weeks, and the downtime could be longer given that the extent of the damage is yet to be determined, Rystad Energy said in a note. The plant had been running at close to its capacity in recent months, helping Europe offset recent disruptions in Russian supply.
The bulk of Freeport LNG’s output had been heading to Europe before the incident – rising from 40% in March to close to 60% in May. The plant has been able to quickly divert extra supply to Europe amid soaring prices and Moscow’s invasion thanks to the fact that most of its capacity is uncontracted.
Who dunnit?
Gazprom was accused of squeezing gas supplies to Europe last year and exacerbating the gas crisis to put pressure on the EU to sign off on new long-term gas contracts the Kremlin needs to develop its vast Yamal gas deposits.
Gazprom made a point of sticking scrupulously to the terms of its supply contracts at a time when shortage and panic had sent gas spot prices through the roof.
Now some observers say that Gazprom is again using gas as a political weapon in Russia's confrontation with the West with the goal of making sure that Europe does not have enough gas in storage before the heating season starts in October.
However, with Europe’s tanks, and especially those in Germany and Italy, half full by June it seems that Europe is on course to have enough gas ready to use in five months' time.
Gazprom’s slowdown in delivery – and the Nord Stream 1 pipeline is due for its annual maintenance break in July – also can be seen as a threat of the Kremlin deciding to unilaterally cutting Europe off from gas as part of its clash with the West. This scenario is considered highly unlikely by analysts as although it would cause a gas crisis in Europe, the deliveries would not be restarted and the Kremlin would have to forego significant amounts of revenue it currently badly needs to finance its war.
2.14 Russian oil tanker insurance ban is a bad idea
Leaders of the European Union and the United Kingdom agreed at the start of June to seek a ban on all insurance for tankers that carry Russian oil anywhere in the world. Doing so might sound like a logical next step in tightening sanctions against Russia. But it is not.
46 RUSSIA Country Report October 2020 www.intellinews.com