The united front of the US and Europe against Russia is falling apart due to the fuel crisis and high gas prices, writes Jinju Lee, a columnist for The Wall Street Journal.
As the author recalled, two events occurred on Tuesday that dealt a blow to the global energy market. First American company
Freeport LNG said its LNG plant in Texas, which closed after an explosion and fire on June 8, will not resume operations until late 2022. The failed plant will reduce the volume of exports of liquefied natural gas from the United States by 18 percent, which means that Europe will receive less fuel.
The problem was aggravated by the shutdown by the Russian Gazprom of part of the turbines at Nord Stream, as a result of which the volume of deliveries to the European Union fell to 67 million cubic meters per day from the planned 167. The reason for this was the delay in the work of the German company Siemens, which failed to return the gas compressor units from repair.
Both of these events provoked a sharp jump in gas prices in the EU to $1,300 per thousand cubic meters. Soaring fuel prices, leading to plant closures, are salt in the wound for the continent, Lee said.
At the same time, in the United States, the failure of an LNG plant in Texas reduced the cost of raw materials by 17 percent due to the narrowing of exports to Europe. U.S. industrialists, catching on to this close relationship, could lobby for reduced supplies to the EU to keep prices affordable at home, the columnist said. If they achieve their goal, there will be a split between Washington and Brussels, the journalist believes.
So far, they have maintained a united front in energy policy. The states even guaranteed that they would be able to supply European countries with LNG without any problems, Li recalled. However, the sudden drop in gas prices for some and financial hardship for others increase the risk that the interests of the parties will diverge, he concluded.