Oil prices were down on…
Many Americans feel that gasoline…
The U.S. imposed on Tuesday sanctions on the Russian pipe-laying vessel that was expected to complete the construction of the gas pipeline Nord Stream 2, while several Western companies are said to have abandoned links to the project for fear of sanctions.
The final stretch of the construction of the controversial pipeline now looks even more uncertain, and even Russian gas giant Gazprom has warned investors that the Nord Stream 2 project could be suspended or entirely discontinued due to extraordinary circumstances, including “political pressure.”
The U.S. Department of State slapped sanctions on Tuesday on the Russia-based entity KVT-RUS and identified the pipe-laying vessel FORTUNA it owns as blocked property.
“Nord Stream 2, if completed, would give Russia the means to completely bypass Ukraine, depriving Ukraine of vital revenues and opening it up to further Russian aggressive actions, while providing the means to use natural resources as a tool of political pressure and malign influence against western Europe. Today’s announcement demonstrates that the United States is not afraid to hold accountable those who continue to aid and abet this tool of Russian coercion,” the U.S. Department of State said.
Meanwhile, German engineering and construction giant Bilfinger has informed the U.S. and the Nord Stream AG company behind the pipeline that it would quit the project, becoming the first German firm to withdraw from Nord Stream 2, German tabloid Bild reported on Tuesday, citing letters of Bilfinger it had seen.
Bilfinger was contracted to deliver safety and process control systems for the pipeline in an order worth US$18 million (15 million euro), according to Bild.
In another company withdrawal, Switzerland-based Zurich Insurance Group has terminated insurance coverage for Nord Stream 2 that was sanctionable under the National Defense Authorization Act for 2021, Zurich Insurance’s spokesperson Thomas Baer told Russian news agency TASS on Tuesday.
The widening U.S. sanctions on Nord Stream 2 are a kind of hybrid warfare used by the United States, Vladimir Putin’s Press Secretary Dmitry Peskov said last month. Speaking to reporters on Tuesday, Peskov said that “This international project is still facing crude, illegal pressure from the United States of America,” Russian news agency TASS reported.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
With 96% of the 1230-km long pipeline already completed and with billions of dollars already spent on constructing it, the prospects of Gazprom or Russia suspending it or discontinuing it are unthinkable.
Moreover, withdrawal of German engineering company, Bilfinger, with a contract of $18 million is a non-event. Also the termination of insurance cover for Nord Stream 2 by Switzerland-based Zurich Insurance group is another non-event. Russian or Chinese insurance companies could take care of that.
Furthermore, slapping US sanctions on the Russia-based entity KVT-RUS which owns the pipe-laying vessel Fortuna won’t disrupt its work in Danish waters unless Denmark succumbs to American pleasures. Even then, Russia could sell the Fortuna to another entity. It did a similar act when Rosneft sold all its assets in Venezuela to an unknown Russian entity to avoid US sanctions but the new entity continued to market Venezuela’s crude oil exports around the world with impunity.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London