On Christmas Eve, Russian President Vladimir Putin said that the European Union was responsible for its complaints of record gas prices due to some of its members reselling Russian gas at high markups. Putin went on to say that the EU should approve the Nord Stream 2 Pipeline as a route for Russian gas if it wants to reduce prices.
The European gas price index hit a new record last Tuesday, marking an increase of almost 800 percent since the beginning of 2021. The price fell on Friday but still was up more than 400 percent for the year.
The U.S. and several nations in Eastern Europe strongly oppose the Nord Stream 2 Pipeline, claiming that it will make the EU unnecessarily dependent on Russia for gas supplies. Russia currently supplies about 35 percent of the EU’s gas demand.
The pipeline was completed earlier this year but still lacks regulatory approval from the EU and the German government. Putin said that additional Russian gas supplies on the EU market would reduce the price.
Prices have also surged because of supply issues related to the Yamal-Europe pipeline that delivers typically Russian gas to Western Europe. The pipeline ran in reverse for much last week, with gas flowing to Poland from Germany. Putin claimed that Russia has been “sidelined” by Poland from managing the pipeline.
Putin further said that Germany was harming European supplies by reselling Russian gas to Poland and Ukraine. Meanwhile, Russia has reportedly reduced gas transmission across Ukraine, allegedly to increase pressure on the EU to approve the Nord Stream 2 pipeline on Russian terms.
Russia’s Deputy Prime Minister Alexander Novak told reporters last week that he believes European consumers are interested in seeing Nord Stream 2 receive approval to operate. He added that EU member nations had erred in reducing their use of long-term supply agreements to use the spot market, which experiences much more price volatility.