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Russian Oil is Fueling Geopolitical Fragmentation

Russian Oil is Fueling Geopolitical Fragmentation

Russia's invasion of Ukraine has…

U.S. Broadens Sanctions On Russia-Led Nord Stream 2 Pipeline

The U.S. is broadening the sanctions against service providers and those funding vessels involved in the construction of Nord Stream 2 in a fresh attempt to prevent the Russia-led gas pipeline project from completing, the U.S. Department of State said in new guidance on Tuesday.

The sanctions are a follow-up to U.S. sanctions on the Nord Stream 2 project from December 2019, which resulted in Western vessel and technology providers pulling out of the project.

Following the announcement of the sanctions last December, Switzerland-based offshore pipelay and subsea construction company Allseas immediately suspended Nord Stream 2 pipelay activities.

Now the United States is including in the sanctions companies “providing services or facilities for upgrades or installation of equipment for those vessels, or funding for upgrades or installation of equipment for those vessels,” according to the latest guidance.

“We continue to call on Russia to cease using its energy resources for coercive purposes,” the State Department said.

“Russia uses its energy export pipelines to create national and regional dependencies on Russian energy supplies, leveraging these dependencies to expand its political, economic, and military influence, weaken European security, and undermine U.S. national security and foreign policy interests.  These pipelines also reduce European energy diversification, and hence weaken European energy security,” the State Department noted.

The United States, several European countries including the Baltic states and Poland, as well as the European Union (EU), have expressed concern about Russia using gas sales and its gas monopoly Gazprom as a political tool.

In July, the United States warned companies helping Russia to complete Nord Stream 2 that they should ‘get out now’ or face consequences, as the Trump Administration steps up efforts to stop the construction of the controversial Russia-led pipeline in Europe.

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“It’s a clear warning to companies aiding and abetting Russia’s malign influence projects will not be tolerated. Get out now, or risk the consequences,” U.S. Secretary of State Mike Pompeo said in mid-July.  

By Charles Kennedy for Oilprice.com

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Leave a comment
  • D W on October 22 2020 said:
    “Russia uses its energy export pipelines to create national and regional dependencies on Russian energy supplies...”

    And what does the U.S. use its Dollar privilege for? Pot calling the kettle black.
  • Mamdouh Salameh on October 21 2020 said:
    With 95% of the Nord Stream 2 gas pipeline completed, it is unstoppable.

    Since the days of the former Soviet Union, the United States has tried and failed to
    derail Russian gas and oil pipelines to Europe. Nord Stream 2 is no exception. President Trump’s administration will not fare better that both John F. Kennedy and Ronald Reagan who failed to derail USSR-backed energy-export pipelines such as the Friendship (Druzhba) oil pipeline in the 1960s and the Brotherhood (Bratstvo) gas pipeline in the 1980s respectively.

    US sanctions have failed miserably to cripple Iran’s oil industry or to effect a regime change in Venezuela. Furthermore, they made Russia’s economy stronger and more diversified since the sanctions were imposed in 2014. Like the sanctions, the tariffs against China showed China’s economic prowess which enabled it to win the US trade war against it.

    Is it not time for the Americans to do something more constructive rather than destabilizing? They can achieve more in diplomacy and goodwill.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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