US negotiates with Qatar on gas supply to Europe in case of Ukraine invasion
The United States is in discussions with Qatar and other major gas exporters to plan contingency measures in case Russia’s invasion of Ukraine disrupts supplies to Europe.
Negotiations with Qatar and EU member states, focused on securing more cargo of liquefied natural gas via sea, have become urgent after high-level security talks between Washington and Moscow this week made minimal progress.
This has raised concerns of conflict that could affect gas supplies at a time when Europe is facing record prices. However, officials warn that there is no “magic wand” to address potential shortages as the continent is engulfed in an energy crisis.
“We are looking at what can be done to prepare for an event, especially mid-winter with [European natural gas] a senior US government official said.
“We discussed what could be moving around the market, what could help. . . things we can prepare now to deploy if and when the crisis escalates.”
Tensions between the West and Russia have been running high as Moscow has deployed some 100,000 troops on the Ukrainian border. The United States has threatened severe sanctions against Russia if it trespasses, while some energy officials accuse the Kremlin of taking advantage of its gas exports.
Fatih Birol, head of the International Energy Agency, said last week that Russia tightens gas supplies to Europe at a time of “increasing geopolitical tensions”.
There are concerns that the conflict could lead to a further drop in gas supplies to Europe, which is facing a growing cost of living crisis and rising inflation as gas prices have fallen. skyrocketed. With gas inventories at a record low for the year, officials fear Europe could face industrial disruption, prolonged power outages or even loss of heating supplies if Russian exports fall. strong after an invasion.
A senior Joe Biden administration official acknowledged that existing contracts between LNG exporters and Asian buyers could complicate efforts to redirect supplies to Europe.
“No magic wand,” said the official. “It’s all really hard, really complicated. Find a way to do it within the structure of how markets work, how trade terms work, how goods are shipped. “
The official added that it is becoming increasingly clear that Russia has tightened gas supplies in recent months to gain leverage over European capitals.
“This is not a market situation we are dealing with. These are not market forces. These are manipulated markets,” the official said.
Europe’s dependence on Russian gas has complicated efforts to present a united front against threats from Moscow.
While most observers expect Russia to avoid cutting exports altogether, there are concerns that Moscow could still squeeze supplies further, or that gas export infrastructure in Ukraine could be damaged. damage caused by conflict.
Energy regulators have also warned of the potential impact of US sanctions after Mr Biden this week said sanctions could include stopping Russian banks from trading. U.S. dollar – the main currency of the global merchandise trade.
An energy industry executive says Europe will almost certainly face extreme prices in the event of disruptions that could require concerted action by governments to source transport. LNG by sea.
“They will have to compete effectively to grab all the supply in the market, get the goods out of Asia, and the end result could be that taxpayers will have to pay,” said the energy executive. .
“It will be like procuring PPE at the start of the pandemic, with governments needing to step in.”