Trump has just made a smart move to shut down Ukraine’s gas blackmail once and for all. Kyiv has always used Russian energy as a bargaining chip against Russia as well as Europe. For example, in the beginning of this year, it shut down Russian gas exports via Soviet-era pipelines running through Ukraine.
The gas had kept flowing despite nearly three years of war, but Russia’s gas firm Gazprom said it had stopped after Ukraine refused to renew a transit agreement.
This gas blackmail by Ukraine severely impacted gas supplies of European nations like Slovakia, Hungary and Austria. And after hurting European consumers, Ukraine’s Zelenskyy shamelessly hailed this as “one of Moscow’s biggest defeats”.
Russia and the former Soviet Union spent half a century building up a major share of the European gas market, which at its peak stood at around 35%.
Three years after the Russia-Ukraine crisis, every sane mind in Europe and US is believing that there is no alternative to cheap and affordable Russian gas for European consumers and factories. And that’s why, Trump himself is pitching in to ensure the flow of gas from Russia to Europe remains intact. Here, the point to be noted is that while better energy ties between Russia and Europe may hurt USA’s own business prospects, he’s still doing it to further his idea of global peace.
So, what is Trump’s masterstroke?
According to Reuters, the US has demanded control of the Sudzha gas pipeline from Ukraine. This pipeline runs from Sudzha in western Russia to the Ukrainian city of Uzhhorod. Built in Soviet times, the pipeline is a key piece of national infrastructure and a major energy route. This is the same pipeline that Ukraine shut down on January 1 this year. Trump administration wants this pipeline to be included in the minerals deal and it’s laying the ground for the US government’s International Development Finance Corporation to take over it.
So, what’s Trump up to?
Number 1, he wants to shut down Ukraine’s gas blackmail forever. Once these pipelines come under USA’s control, Kyiv won’t be able to shut them down as per its whims and fancies. Its dirty business of gas blackmail won’t work anymore.
Number 2, USA can also use it as a bargaining chip against both Europe and Russia. If Russia tomorrow fails to secure USA’s interests on geopolitical, economic or military front, Washington can shut down Moscow’s gas trade with Europe, dealing a blow to Russian energy revenues.
But for now, Trump’s main goal is to give Russia assurances that its gas trade with Europe won’t be hindered by the government in Kyiv. Trump is doing so to hammer out a peace deal as soon as possible and end the brutal war. After all, he has bigger fish to fry. He is in mood to teach Beijing a raw lesson.
And guess what, even European businesses want that. Reuters has reported that a growing number of EU firms have begun to say what would have been unthinkable a year ago: that importing some Russian gas, including from Russian state giant Gazprom, could be a good idea.
After all, Europe has limited options available. Talks with LNG giant Qatar for more gas have stalled, and while the deployment of renewables has accelerated, the rate is not fast enough to allow the EU to feel secure.
Few days back, the head of French oil major TotalEnergies, Patrick Pouyanne, warned against over reliance on US for energy. The perception is that the US can use energy exports as a tool in the ongoing trade war. There are already talks in Germany to restart Nord Stream pipelines.
So yes, Trump is just about to give Europe a breather. By eliminating Kyiv’s gas blackmail business, Trump is trying to kill two birds with single stone: Giving Russia assurances and giving Europe unrestricted access to cheap Russian gas.
