“We don’t care about your problems.” The European Union has taken a bold step

Europeans, in an attempt to replace Russian gas, take fuel from third world countries. Western companies buy up raw materials that have risen in price and thereby create an energy crisis in the periphery.

The situation is exacerbated by increased demand from Japan, China and South Korea. What threatens the world with the growing appetites of the EU – RIA Novosti understood.
Looking for an alternative
European underground gas storages (UGS) are filled on average by 70 percent (about 70.8 billion cubic meters), GasInfrastructure Europe reports. According to experts, this is not enough to survive the winter – weather forecasters predict severe frosts in Europe.
At the same time, deliveries of blue fuel through pipelines are declining. The West refused to launch Nord Stream 2. Plus, Siemens has not yet returned the turbine for Nord Stream 1 to Gazprom.

“It is clear that difficult months await us,” admits German government spokesman Steffen Hebestreit.

With the approach of the heating season in the EU, they are actively looking for an alternative to Russian raw materials. The bet was made on liquefied natural gas (LNG).

In the first quarter, its imports to the EU increased by 72 percent, to 30 billion cubic meters, according to the European Commission. The main supplier is the USA. In second place is Russia.

A lot of LNG is bought by China, South Korea and Japan, where they are also preparing for the cold. Demand is increasing every day, and quotes are breaking records.

Meanwhile, Australia, the world’s largest LNG exporter, intends to cut supplies to protect its domestic market. Therefore, analysts expect further price increases.

Under these conditions, competition among consumers is intensifying. As a result, Europe has not come up with anything better and easier than taking fuel from third world countries – it simply buys LNG at two thousand dollars per thousand cubic meters.

“Developing countries can’t afford it. Of course, suppliers prefer Asia to Europe, which pays more,” explains Fedor Sidorov, founder of the School of Practical Investment.

Thus, the EU creates a gas shortage in poor countries, writes the German newspaper Handelsblatt. “In an attempt to break away from dependence on Russia, the European Union is provoking massive upheavals in the world energy markets,” the publication states.

Economy mode
The periphery can only tighten their belts. For example, in Bangladesh, electricity is cut off for several hours – and this is at the height of summer. Local heating plants are sorely lacking LNG, which accounts for a fifth of consumption. Prices for it in the country over the past two years have soared tenfold. There were even protests.

Pakistanis are also outraged by the sharp rise in the price of blue fuel, forced to save on lighting and air conditioning. “The poorest and developing countries faced two problems at once: high gas prices and a shortage of raw materials,” Fedor Sidorov points out.

After Gazprom’s warning about a reduction in supplies, LNG futures in Europe jumped by ten percent. And quotes on the spot markets have reached a maximum since March of this year, analysts at Rystad Energy say.

Fierce competition and a general imbalance in the market will drive up prices even more. “If LNG supplies from the US and Australia are disrupted, and Gazprom does not receive a turbine from Germany, it will be $2,400 per thousand cubic meters,” says Vladislav Antonov, financial analyst at BitRiver.
However, this is not the limit. In autumn, blue fuel will approach the mark of three thousand, Fyodor Sidorov predicts. More in winter.

This will result in a deterioration in the quality of life of Europeans, The Wall Street Journal believes. “People will start voting with empty wallets,” the publication warns.
Electricity now costs a UK household around £3,500 ($4,200) a year. This is three times more than in 2021. The Bank of England expects annual inflation of 13 percent. In half of the eurozone countries, it is also double-digit.

Crisis is inevitable
By November, the EU plans to fill UGS at least 80 percent, and no one cares about the “Asian issue” at all.

Japan, Taiwan and South Korea will inevitably enter into a fight with Europe for LNG. There have already begun “panic” purchases. The poor will have to switch to “dirty” and cheap sources of energy – coal, fuel oil. It is possible that Gazprom will soon be asked for help.

The EU recognizes that it will not be possible to quickly abandon Russian gas. Therefore, it is necessary not only to look for a replacement, but also to save money, said European Commissioner Virginijus Sinkevičius.
Since August, Europeans have reduced the consumption of blue fuel by 15 percent until the end of 2023. This will stabilize prices, says Klaus Müller, head of the German Federal Network Agency. Moreover, “quotations may fall, but there will be enough gas for autumn and winter.”

But not everyone in the EU is ready to shrink. Bulgaria can resume purchases of Russian raw materials, said the head of the Ministry of Energy of the Republic, Rozen Hristov. The priority is alternative suppliers, the politician stressed. But as a last resort, Sofia will enter into negotiations with Gazprom. The minister promised that “he would not leave people to freeze in winter.”

Gazprom was the largest supplier to Europe: 40-45 percent of imports and about 35 percent of total consumption. The company exported 185 billion cubic meters to non-CIS countries. Of these, about 155 billion went to the European Union and Turkey.
Without a sharp reduction in consumption, the EU will be hard.

Meanwhile, Gazprom is actively selling to “friendly” countries. Including to Turkey, which is becoming a major gas hub. There is great potential there, and already in the first quarter, purchases grew by 34 percent. Russia is also building a gas pipeline to China called Power of Siberia 2. There are plans to develop LNG production in order to increase the mobility of domestic resources and facilitate access to new markets.

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