Gazprom CEO Alexei Miller is having a good week. After Russian President Vladimir Putin inked a massive new gas deal with China in Beijing earlier this week, Miller somewhat ominously noted that the new deal will affect the price Europe pays for Russian gas. Reuters reports:
Russia’s landmark deal to supply natural gas to China will affect prices in Europe and have an impact on international liquefied natural gas projects, the chief executive of state-run Gazprom said on Friday. […]“It can be assumed that the signing of the contract will affect gas prices on the European market,” he said without giving any details.Miller added that the deal will also have an impact on LNG projects in eastern Africa, Australia and western Canada.
Miller may be confirming the obvious, but this should still be worrying for Europe. Any energy deal worth nearly half a trillion dollars is going to have a large and long-lasting ripple effect, but as Russia’s biggest energy partner, Europe will feel it more keenly than most.We’ll leave the specific predictions about what’s to come to the experts, but we can say this: By securing a new customer—and a deal for a pipeline that will give it access to the hungry Asian LNG market—Russia has strengthened its position at the bargaining table with its Western customers. Europe’s leaders have been talking about decreasing their reliance on Russian gas supplies in the wake of the Crimean annexation and Ukrainian aggression, but they aren’t exactly spoiled for options. Russia, on the other hand, has just shored up its position, and showed it can roll with whatever punches Europe is ready to throw.