LONDON-Russia stepped in to save Europe, offering to raise gas prices for the region. Experts said that this made it clear that Europe was no longer at Russia’s mercy, as they warned.

Natural gas contracts hit new highs in Europe this week — and regional benchmark prices are up almost 500% so far this year — with heightened demand and a squeeze in supply putting pressure on the energy sector as the weather turns colder.

The prices fluctuated on Wednesday as they hit new highs and then fell after Vladimir Putin, the Russian president, intervened to offer an increase in Russia’s gas supplies for Europe.

According to market analysts, the action showed Europe is more vulnerable to Russia. Germany must now certify Nord Stream 2’s controversial pipeline project that will transport more Russian gas through Europe.

To the dismay of the U.S., the $11 billion pipeline was completed. The U.S. has been opposed to this project for many years. They warned that the project could compromise Europe’s energy security.

Bipartisan support for the pipeline has been galvanized by Trump’s and Obama’s administrations. Additionally, President Joe Biden announced sanctions on companies who were part of the project. but these were waived in May in what was seen as an attempt by the U.S. to rebuild ties with Germany

Putin used Wednesday’s televised cabinet meeting to propose an increase of supplies for Europe. The Russian leader also mocked the region. for canceling many of its long-term gas contracts in exchange for spot dealsThe Kremlin stated that it was open to negotiating new long-term gas sales contracts.

Many experts think that Russia deliberately withheld gas supplies from Europe to expedite Germany’s Nord Stream 2 certification. Russia denies this however. Dmitry Peskov (President’s Spokesperson) denied that Russia had played any role in Europe’s energy crisis.

According to Alexander Novak, Russia’s Deputy Prime Minister, the anticipated German certification for the controversial pipe could cool down prices.

Ash, who sought a fast certification for Nord Stream 2, believed this was Moscow’s plan. She also stated that the markets are naive if it thinks Moscow will ease Europe’s gas crisis any time before NS2 gets certified.

The German energy regulator has not yet certified the pipeline. According to Reuters on Tuesday, the regulator stated that it must prove it will not violate competition rules and limit the suppliers it uses. Fines can be imposed if the pipeline starts pumping Russian gas into Germany without securing the necessary approvals.

Mike Fulwood (senior research fellow, Oxford Institute for Energy Studies) agreed that Russia could supply additional gas to Europe through Russia. It was tied to the approval of the pipeline.

“Basically,” [the situation for Russia is]He said that if Nord Stream 2 is approved, he would send Nord Stream 2 down with some gas.

Macro Hive CEO Bilal Hafeez said on Thursday, “Street Signs,” that he believed Russia was also using this situation in its favor.

“I believe Russia may have used this crisis energy to profit from the situation here, and to force an acceleration of the use the pipeline. There’s evidence that suggests they could have blocked supply through the Ukraine pipelines in order to enable Germany and EU to speed up the Nord Stream 2 pipe.”

Soaring prices have placed the issue at the top of the EU agenda with leaders calling for more energy independence — given nearly 90% of the bloc’s supplies are imported, with Russia one of the primary sources of imports along with Norway, according to European Commission data

There are many critics of the pipeline in Europe. Ukraine is hurt by it and will be losing valuable gas transit fees due to it bypassing its pipelines. Poland, too, feels vulnerable by Russia’s more assertive neighbors, and says that the pipeline will only serve to strengthen Russia.

This July they issued a joint statementThey blasted the pipeline and said that “the decision to construct Nord Stream 2 in 2015, just months after Russia invaded and illegally annexed Ukrainian territory, caused security, credibility, and political crisis within Europe.”

The question of Europe’s supply of gas has been an ongoing thorny topic. This has caused tension between the U.S. government and the EU. The former chastised Germany, the EU’s biggest importer of Russian natural gas before the NS2 pipe) for agreeing to the Russian gas project.

Experts view the fight for Europe’s natural gas supplies as a proxy war between Russia and the U.S., where both sides are vying for market share with natural gas (Russia), and liquefied gas (the U.S.).

Experts believe that Europe should diversify away from Russia in order to obtain energy.

Fulwood stated that Europe should diversify its supplies to reduce risk. He also noted there have been attempts to import more LNG from the U.S. in recent years.

Fulwood spoke out about the global gas market, as well as the supply problems affecting other gas producers. Fulwood described this situation to be “a perfect storm of demand recovery after Covid” and “a tight supply situation.”

He said that while there was a temporary supply shortage, some logistics might start to get better but it wouldn’t be until next year. So for the next several months we will really be at the mercy on the weather.