Talk politics.

Putin Says American Reporter Is Too ‘Beautiful’ to Understand His Very Clever Point

Aside from his usual misoginyst shenanigans, the more important point from this interview is that Putin has denied Russia ever having used gas supplies as a political weapon to pump up energy prices and put Europe to its knees. The facts show otherwise, though.

So why have European gas market prices suddenly exploded? Currently, Gazprom is providing services only to those who have long-term contracts with them and has doomed the world to unimaginable price spikes. So what's the Kremlin's strategic goal?

This is very similar to an advertising campaign: "All those in Europe who have signed long-term contracts with us can now happily rub their hands," Putin says. His words were duly parroted by Gazprom's deputy chief and the country's permanent representative to the EU: If you have signed long-term contracts with us, you would now be enjoying good prices.

For weeks now, Moscow has been urging Europeans to sign long-term contracts with Gazprom so that they won't have any problems with electricity and energy prices. All of this is happening in the context of an unprecedented crisis on the European gas market: gas prices have been galloping in recent months.

European experts, a number of media and politicians have repeatedly expressed suspicion that Gazprom is purposefully helping create a gas deficit on the European market in order to force Germany and the European Union to launch Nord Stream 2 more quickly. At the moment, however, the impression is growing that the Kremlin has a second strategic goal. Senior Russian officials, some media outlets and Kremlin lobbyists are increasingly pushing for the idea that it is much better to sign long-term gas supply contracts than buy fuel on the stock market in the short term.

The tone and aggressive language of this campaign was set personally by president Putin himself, who has left no doubts that he personally commands Gazprom's policy. "In our country, pricing is also market-based, the price of gas is tied to the price of oil," the president recently said. He clarified that as a member of OPEC, Russia has been artificially restricting oil production for five years and thus participates in the regulation of supply on the world markets.

The claims of the Russian representatives sound convincing, but they do not answer the question why the short-term energy market in Europe has been functioning normally for so many years - and has now suddenly exploded. According to one explanation, last year the European market did not receive enough liquefied gas, which was directed mainly to Asia because of better prices there. Moscow also claims that the cold winter has reduced gas supplies in Europe. Let's not forget the major repair and maintenance works on the gas pipelines in Norway, due to which this major European supplier has seriously reduced its exports to the EU.

This is where the next question logically arises: Then why didn't Russia, which supplies almost 40% of all gas to the EU, increase the gas supply? Instead of taking advantage of rising prices and making additional profits, Gazprom decided to completely stop their sales on the stock exchange and announced that in the fourth quarter and throughout next year they won't be selling additional volumes on the international trading platforms.

Observers have come to the natural conclusion that Gazprom in this case is not guided by its economic interests, but is implementing the Kremlin's political views. In summary: it turns out that currently the Russian state-owned company serves only those who have concluded long-term contracts with it, and in fact boycotts the world market, dooming it to unthinkable price spikes. That way - and this is especially important! - Gazprom is in practice discrediting the principle of short-term stock exchange transactions.

If, as a result, the European gas exchange collapses and most EU countries return to long-term deals with Gazprom (Hungary has just signed a 15-year contract), this will cement the Russian domination of the European gas market.

At the same time, long-term contracts with Gazprom will become a brake on European countries' path to phasing out fossil fuels and switching to new energy sources - the EU's well-known Green Deal. Because even if the development of new energy sources does make the expected huge leap in the coming years, the EU countries will have to buy Russian gas until the end of the 2030s. And that's probably what Moscow is aiming for.