On Friday, the Biden administration announced new sanctions against one Russian ship and two Russian individuals involved in the Nord Stream 2 natural gas pipeline that will connect Russian and Germany.
The new sanctions come after the US reached a deal with Germany on the completion of the pipeline. The Biden administration chose not to sanction the company running the project and appeared to be backing off trying to block the Nord Stream 2 from being finished. The pipeline is said to be about 98 percent complete.
The new sanctions were imposed under the Protecting Europe’s Energy Security Act of 2019, which requires the State Department to submit a list of people and entities involved in Nord Stream 2 and then sanction them.
Friday’s sanctions are seen as symbolic measures that will have no effect on the construction of the pipeline. The sanctions could just be an effort by the Biden administration to placate critics in Congress of the deal reached with Germany.
The US claims that Russia’s desire to expand its trade relationship with Germany is a "threat" to Europe. Ukraine isn’t happy about the deal because it stands to lose money from natural gas transportation fees. Under the US-Germany deal, Berlin agreed to invest in Ukraine.
"Even as the administration continues to oppose the Nord Stream 2 pipeline, including via our sanctions, we continue to work with Germany and other allies and partners to reduce the risks posed by the pipeline to Ukraine and frontline NATO and EU countries and to push back against harmful Russian activities," Secretary of State Antony Blinken said in a statement.
Separately, the US and UK slapped sanctions on seven Russians for the alleged poisoning of Alexei Navalny, which Moscow denies it was responsible for. There was hope for an easing of tensions between the US and Russia after Biden and Putin met in Geneva in June. But the sanctions show that the US is still determined to pursue a hostile policy against Moscow.
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US sanctions failed miserably to stop the completion of Nord Stream 2. The whole world including the overwhelming majority of Europeans knows that US opposition to the gas pipeline has very little to do with the EU’s energy security and almost everything to do with selling its LNG to the EU.
The German Chancellor Angela Merkel told President Biden during her last visit to Washington DC that Germany will buy US LNG provided the price is right. However, Russian piped gas is far cheaper than US LNG.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London