Wednesday, 29 April 2015

Russia, Europe, Turkey and natural gas- Pipes in the Sky?

Europe is diversifying away from Russian natural gas.

It may be harder for Russia to charge higher prices to European customers in future as a result.

Russia’s price gouging and halts in supply in 2006, 2009 and 2014 have seen more accusations that Russia uses energy supplies as a political weapon.

Because of EU opposition to the breaking of ownership rules, Moscow had to close its much vaunted South Stream pipeline to Europe in December 2014.

It has sought to replace that with a pipeline through Turkey to south eastern Europe, the so called Turkish Stream.

In 1995 Russia recognised the Armenian Genocide by Turkey in 1915.

Russian President Vladimir Putin went to Armenia for the 100th anniversary in April 2015. 

His speech there reaffirming Russia’s recognition of the genocide brought a blasting from Turkey’s government.

Turkey said that Russia, “knows genocide well,” referring the the mass murder and deportations of the Soviet Union.

The episode can do nothing to help Russia’s pipeline dreams.

Indeed, there is much politely left aside in gas pipeline negotiations with Turkey. Turkey is a NATO member. The prospect of Iranian gas being piped to Europe instead has been raised. 

All of this raises the prospect of Russia’s gas announcements coming to sound like so much hot air.

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