Sanctions have consequences… no matter if you are the one implementing them, or the one receiving them. And since Europe relies heavily on Russia to supply them both oil and natural gas for their economic engines, attempts by EU nations to harm the Eurasian power through the limiting of energy imports and the slowing down the Nordstream Pipeline project have suddenly backfired as natural gas reserves are now at crucially low levels heading into the winter season.
The European Union’s biggest natural gas producer is running out of reserves.
The Netherlands, also the region’s largest trading hub for the fuel, has used up almost 80 percent of its natural gas reserves, Dutch statistics office CBS said on Friday. Production fell 38 percent over the previous two years and is set to fall further as the government limits extraction because of earthquakes in Groningen, the province that houses the EU’s largest gas deposit, it said.
Groningen’s decline also has broader implications for the European gas market, which will be more reliant on outside countries to meet its energy needs. European and Eurasian countries consumed 1 trillion cubic meters of gas in 2015, according to the BP Statistical Review. – Bloomberg
Back in early 2014 when the U.S. asked its European allies to join in with economic sanctions against Russia, Washington promised to help supplement any lost energy resources for the EU by saying they would begin shipping over LNG within a year. However, this promise has fallen well short of expectations and necessary levels and are leaving the EU suddenly in a bind here in late 2016.
Russia has consolidated its energy distribution streams since the sanctions were imposed, and have even changed the game where Rubles and the Yuan are now the accepted payment methods for oil and natural gas coming from the Eurasian state. And if we find Europe having to negotiate for even more supply in the coming months and years, the ramifications for them staying with the U.S. in the ongoing economic warfare of sanctions against Russia suddenly shift in favor of ditching their unified effort in trying to bankrupt Putin.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.