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Is Russia Sending Enough Natural Gas To Europe?

Geopolitics

European natural gas prices started dropping this week after Russia started increasing supplies, but the market’s initial optimism over more Russian gas was dulled later in the week when shipments were smaller than hoped for. Overall, the increased Russian gas flow isn’t any more than it should have been at this time of year under contractual agreement. It’s not enough to assure Europe that it can avert an energy crisis.

The EU is expected to hit Belarus with new sanctions as early as next week in retaliation for the ongoing migrant crisis. Reuters reported that fresh sanctions will include some 30 individuals and entities including the foreign minister and Belarusian airline Belavia. Earlier this week, the EU accused Belarus's leader Alexander Lukashenko of luring migrants with the false promise of easy entry to the EU. EU member countries Poland, Lithuania, and Latvia have all seen a surge in the number of people trying to enter their countries illegally from Belarus. At the same time, Belarus, in an act of retribution, is threatening to cut European gas supply (one of Russia’s natural gas pipelines to Europe runs through Belarus).

Ahead of the resumption of nuclear talks with Iran in Vienna on November 29th, it increasingly appears likely that Iran’s perception is that it has growing leverage and will bargain for maximum sanctions relief for any movement on its nuclear program.

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