Since the first Russo-Ukrainian "gas war" in 1993 and 1994, the gas relationships between the two countries have been a stalemate. Ukraine's status as a major transit country helped bring the case into the political arena.
This is a stalemate for the producer and the consumer. It is advantageous for the transit country, the intermediary if the producer and the consumer cannot force it to fulfil its obligations. Ukraine does not fall under this definition. The question of who does, who acts as a global intermediary with impunity.
Given the Third Energy Package, the EU can't be excluded from the Ukrainian formula. The discussions over the Third Energy Package initiated during the 2006 "gas war" and its entry into force was timed to coincide with the 2009 "war" and the signing of a direct 10-year contract between Russia and Ukraine.
Gazprom pipelines. Photo: TASS.
And there might be a catch: the discussions over the Third Energy Package started after Gazprom, the Russian gas monopolist, had renegotiated long-term contracts with European buyers in 2004. That is after Europe had secured gas supplies from Russia.
There are similar stories to bear in mind. The 15-year contracts' end date concluded in 2004 overlaps with the 10-year "Ukrainian" contract finished in 2009. It looks quite conspiratorial if we note that Nord Stream 2 was planned to be completed by the end of these contracts in 2019.
The Third Energy Package established a single-oil-and-gas-buyer regime, shutting Gazprom out of the EU internal market. The elaboration of the Package was under steady political pressure from Ukraine or whoever might have been standing behind Ukraine.
The lead singer of the European aria at the Ukrainian orchestra was Berlin, which, if successful, would gain direct access to Russian resources. Germany was turning into the central gas hub, a major distribution centre in Europe with unlimited regulatory capacity. The country was about to become that intermediary between the producer and the consumer.
Some may also remember Hunter Biden was appointed to the board of directors of Ukraine's GTS immediately after the Maidan. Therefore, it was not Ukraine that Berlin set its sights on, so it got punished together with Europe. The Nord Stream explosion buried German hopes to establish an independent economic project.
The Nord Streams sabotage occurred after German Chancellor Olaf Scholz's failed trip to the Middle East in search of spare volumes of gas and oil. The trip showed that, for good or for bad, there is no real alternative to Russian energy supplies. Not only is there no spare capacity, but newly built capacities have already been contracted. So Germany basically would have needed to launch the Nord Streams pipelines at full capacity.
Germany might have been enjoying the status of Europe's major economy for far too long, heavily relying on Russian gas and oil. Now Germany has to "wake up" due to an ending era of its economic leadership.
The hunt
As soon as the Nord Stream 2 gas pipeline project was announced, the "Nord Stream 2 hunt" began. And no wonder the project, by its scale and prospects, was massive. Fair to say, the political pressure and public scrutiny were enormous. Nord Stream 2 was on the media focus and the energy agenda.
It's all about energy. Photo: Bloomberg.
Earlier this year, Germany was still hesitating about cancelling the project as it had been designed to meet the German industrial demands amid evolving energy issues.
However, Russia played by the American scenario, and the White House demanded a gas embargo. The European Union took a transition time until December to look for alternative suppliers. It turned out to be easier said than done. The German industry, traditionally considered the economic driver of the EU, would be hit first and most likely the most.
Scholz's recent trip to the Middle East was probably the final straw. The Arab countries would not be as fast and easy to refocus from Asia to Europe.
The dominant market is the ruler
The explosion of the WTC towers shifted the issue of the existence of a modern model of the world market from the economic plane to the anti-terrorist one. The sabotage of the underwater communications of Nord Stream brought it into the field of global security.
Such a level of sabotage cannot simply be disregarded. This is not an act of aggression against a specific state, be it Russia or Germany. The pipelines are part of the vital European infrastructure.
The notion of "controlled chaos" became trivial and boring. However, the explosions of the Nord Streams might turn out to be handy for the ideologues of the modern global governance model.
The sabotage could be regarded as a backlash to Germany's attempt to isolate itself from the general energy capital markets. It is not about the chaos but the approach and management tools. What a paradox: mess for the sake of governance. However, a specific method has been employed in the oil market and is now implemented in the gas industry. The model is called spot pricing.
Spot pricing is a trading method and a mechanism to interpret the present based on visions of the future, with the past as the central reference point. It is a struggle between short-term opportunities and strategic perspectives.
Spot pricing pulls funds out of long-term investments into immediate speculative transactions. The method has been used since 1986 in the oil sector.
Such market mechanisms are essential to rule economics and politics. Everything else, including Germany, Europe, Ukraine, Russia, explosions, or wars, are side effects.
