“We are ready to work with the Europeans, but they must also express the desire to collaborate (with us) in a lasting and stable manner »declared Vladimir Putin on March 9 after a government meeting devoted to the situation of the hydrocarbon market. A surprising announcement from the Russian president: five days earlier, he had raised the possibility of not waiting for April 15, the planned date of the definitive ban on Russian oil imports by the European Commission, to stop deliveries to European countries.
Already on January 26 of this year, the Commission approved the phased ban on imports of Russian gas, leading to a total ban on January 1, 2027. Between an outstretched hand and the brutal closing of the valves, Europe is up against the wall.
Unprecedented drop in gas reserves
In response to the attack by the United States and Israel, Iran closed the Strait of Hormuz, blocking a significant portion of global hydrocarbon exports. Experts anticipate that gas reserves in European storage infrastructure will fall between 22% and 27% by the end of March, compared to a usual norm of 40%. If supplies were to fall, and they will, the volumes of fuel available would decline even further. The liquefied fuel market is the hardest hit. Europe currently receives almost half of its gas, or around 45%, in the form of LNG, whereas before the war in Ukraine this costly and unstable mode of transport represented only 19% of its imports.
The majority of deliveries come from the United States, Norway, Algeria and Qatar. Due to the shutdown of Russian gas pipelines, these States are able to sell their hydrocarbons by applying substantial margins in the process. Norway, the leading exporting country, is operating at maximum capacity and cannot increase them. Since the war against Iran launched by Donald Trump, 20% of the world’s gas which came from the Persian Gulf, mainly from Qatar, has suddenly disappeared from the market. With no source to compensate for this deficit, prices immediately jumped by 40% in the space of a few days.
An inextricable situation
It is unlikely that the situation will resolve in the short term. The American command, which initially expected an operation of three to four weeks, is now planning combat until September. Until then, if the Persian Gulf does not reopen, Europe’s gas reserves will inevitably dry up. This means the shutdown of thermal power plants, the interruption of the supply of heating and hot water, as well as the paralysis of several branches of the chemical industry, including the production of fertilizers and plastics.
However, even if the war is prolonged until September, nothing will be able to prevent Iran from maintaining its blockade of the Strait of Hormuz. Because despite the death of Ali Khamenei and certain Iranian leaders, the power in Tehran remains inflexible and refuses any negotiation. If Trump opted for a land operation, this would only be possible from Iraqi territory, while Hormuz would in any case remain under Iranian control. Even in the event of a total annihilation of the Iranian fleet, the army would continue to sink the tankers using drones and the strait would remain closed.
Vital necessity and American dependence
In this context, the probability increases that the twentieth package of sanctions against Russia will be postponed. He was already facing a Hungarian veto on February 23 because kyiv had not repaired the Druzhba oil pipeline, the importance of which is critical for Budapest. A reality which prevails over the peremptory formulas of the head of French diplomacy: “I told you, he insisted in Brussels following the Hungarian vetothe question is not whether the twentieth sanctions package will be adopted. It will be. That’s a certainty. This is the twentieth time we have done this exercise. The question is when it will be”.
It is urgent to seize the opportunity of Russian hydrocarbon imports
However, it is now obvious that this postponement must be definitive. The energy survival of Europeans is at stake. From now on, diversification and reduction of the cost of hydrocarbons are a vital necessity for them. Proof of this crying need: while waiting for the total ban on Russian gas on January 1, 2027, Europeans rushed to the Arctic gas fields (Russian Yamal field), of which they purchased 93% of the production in February.
France, as the largest importer of LNG in Europe, will suffer more than other countries from the impact of the war on the market. The United States’ monopoly position will allow it to dictate its price, dealing the final blow to an already moribund European industry. Moreover, the EU has lost all leverage over Washington. Today the European Union is struggling to defend its own sea lanes, not even to mention Denmark’s sovereignty over Greenland. And with an American defense budget that has jumped by 50% and openly protectionist rhetoric, Europe is absolutely in no position to compete with the United States.
Global bidding war
On the oil market, the situation is no better. Global logistics has turned into a tense auction: Asia, hit hard by the war in the Persian Gulf, is ready to pay a high price and appropriates the volumes from secure routes.
Consequently, the European deficit is only getting worse without it being possible to quickly find an alternative. The market reacted instantly: in just a few days, fuel increased by 20%. While at the beginning of February the barrel was trading at less than 70 dollars, the Qatari Minister of Energy is now predicting a surge in prices of up to 150 dollars.
Trump allowed India to acquire Russian oil, but did not agree to a similar move in favor of the European Union. What is permitted to the Asians is not permitted to the European allies, the latter pretending to have banned hydrocarbons from the Russian Federation on their own initiative. To restart deliveries of cheap Russian fuel, it will no longer be enough to put the Druzhba oil pipeline back into service. Ukraine closed it just before the start of the war with Iran after damage caused by a Russian bombing. In the current context of energy suffocation in European countries, this initiative can hardly be interpreted other than as a malicious act against their interests.
Nord Stream gas pipelines, Europe’s breathing tube
The return of full European energy capacities also requires the reactivation of the Nord Stream gas pipelines, which, as the latest investigations tend to demonstrate, were allegedly destroyed by the Ukrainians. Otherwise, this strategic asset which was the subject of an act of sabotage in 2022, would be likely to be bought by the United States. Some investors, like Stephen Lynch, have already expressed interest in acquiring this infrastructure. From then on, the EU would no longer have the slightest escape from the American monopoly on its energy supplies. This is a disaster scenario, in which Europe would find itself reduced to the whim of Washington.
As Vladimir Putin pointed out on March 4, after having redirected all of its exports towards China and India in recent years, the interest for Russia in returning to a market from which it was ousted is now much less. A fortiori if it involves supplying countries which finance a war against it, causing deaths among its soldiers every day. However, if arms deliveries to Ukraine only benefit the European military-industrial complex, purchasing fuel from the Russians would benefit our entire economy. Persevering in dogmatism and blindness has become suicidal: let us remember that the billions poured into Ukraine for an uncertain result siphon off the budgets allocated to pensions, salaries, subsidies and social spending.
Thus, to safeguard not only our industry, but also our social model, it is urgent to seize the opportunity of Russian hydrocarbon imports. This step will involve stopping military aid to kyiv, putting an end to the deaths and our industrial hemorrhage. France, like Europe, can only emerge as winners.
