RPT: ANALYSIS - Energy Experts Slam US Using Political Means To Push Gas Exports


RPT: ANALYSIS - Energy Experts Slam US Using Political Means to Push Gas Exports

BRUSSELS (UrduPoint News / Sputnik - 26th March, 2021) In 2020, the US imported the largest volume of crude oil and petroleum from Russia since record-breaking 2011, with an estimated 538,000 barrels per day, despite growing political tensions between the two countries.

This state of affairs is not as surprising as it may seem since oil trade is largely dependent on businesses making decisions, not politicians, experts told Sputnik.

"The United States buy some petroleum from Russia and the level remains relatively stable ... The oil market is a free market, and companies all over the world buy according to price or current interest," Samuel Furfari. professor of geopolitics of energy at the ULB university in Brussels, commented to Sputnik.

According to Furfari, it is normal even for big energy producers like the US to import oil from all over the world as part of barter agreements or to match the specific technical needs of local refineries.

"There are therefore many exchanges, also involving producing countries. It is not the political decision-makers who buy the oil, but the companies," he said.

The situation may be different for the gas market, which is primarily reliant on pipelines, Furfari added. That is why gas projects such as Nord Stream 2 cause more political tensions globally. Opposition from market competitors, the biggest one being the US as a major LNG exporter, should be expected.

However, the expert criticized Washington's tactics and doubted the economic feasibility of importing LNG from the US to Europe compared to the pipeline, especially if Russia retaliates by lowering the price of its gas.

"There is no valid legal or other reason for stopping NordStream 2. And the American arguments in this diplomatic showdown are ludicrous," he noted.

Furfari also slammed the current EU shift towards "all-renewable" energy and subsidized hydrogen production, calling it a "lose-lose game.

" In the long run, dependency of the energy sector on public money will lead the EU industries to "lose all competitiveness and disappear," he concluded.

Another expert, professor Damien Ernst from the department of Electrical Engineering of the Liege university and laureate of the Blondel prize, echoed his colleague and told Sputnik that oil trade is no longer political as oil itself stopped being a political asset.

"Petroleum is not a political asset anymore since the increase of shale oil production in the US and the self-sufficiency in oil of the US. The Russian exports to the US are part of the normal market of oil," he explained.

Here lies the main difference with the gas market, where the US as a potential exporter of shale gas, liquefied into LNG, became the main competitor to Russia.

"The Americans use LNG in their diplomacy, to try and increase their exports and sell more gas. That is the essential reason behind the political talk," Ernst clarified.

The US has already succeeded in persuading Poland and Lithuania to build gas terminals and is pressuring the EU, especially Germany, to switch from Russian gas to American LNG, the expert said. Despite these efforts and "threats," Ernst predicted that it would be unlikely for the US to win as Russia controls the pricing of gas and can position its prices just below that of the LNG, keeping its dominant market share.

"Hence, the political pressures of the Americans on Germany about NordStream 2, where they don't hesitate to threaten the individual subcontracting companies from all countries and boycotting them in the world if they dare continue and finish the pipeline," he explained.

As for Europe's "green" energy choices, Ernst agreed with his colleague that it would not be enough to cover the industries' needs and will require massive subsidies to compensate for the high costs involved.