US gas suppliers were already enjoying extremely high profit margins in trade with Europe last year. It doesn’t look any better today. A billion-dollar deal at the expense of European consumers in the shadow of the Ukraine conflict.
Just last December, the title of “FocusAn article with “Germany’s quarrel with Putin gives the US gas industry the deal of a lifetime”. A business that is still going on and flushes huge sums of money into the pockets of the US fracking industry in particular. An industry that has suffered from high costs and low prices in recent years is now becoming a cash cow. Critics have complained in the past that Washington is only sanctioning the Nord Stream 2 natural gas pipeline because the US leadership absolutely wants to export more liquefied natural gas (LNG) to Europe. LPG, the price of which does not stand a chance against the Russian competition and is not bought under normal market conditions.
The “Focus” explained the profit margin of the US gas industry: “While one million British Thermal Units (MMBtu) of natural gas – equivalent to around 26.4 cubic meters – costs just 1.90 to 3.80 US dollars in the USA, it can be sold for 27.20 dollars in Germany .” This corresponds to a profit margin of up to 1300 percent. In the meantime, the prices have also increased somewhat in the United States and are included at the time of writing this article 4,63 US-Dollar pro MMBtu, but even in Europe the prices are no better than before. We’re talking about current here 28,26 US-Dollar pro MMBtu. A slight drop in percentage, but still more than $20 profit per MMBtu (minus transportation costs).
Even if the Russian energy sector has so far been spared Western sanctions, the current escalation of the Ukraine crisis is having a negative impact on energy prices. WTI Crude and Brent Crude are now trading at around USD 108-109 per barrel, the OPEC Basket at around USD 99. Something that is already fueling fears of a recession given the already high inflation rates in the industrialized countries. But in every crisis there are also the so-called “crisis winners” – like the natural gas producers in the United States at the moment.
However, it is currently becoming increasingly clear that the European states in particular are the biggest losers in this new round of escalation in Ukraine, which could well have been prevented. Washington was and is relatively indifferent to an escalation of the Ukraine crisis, or even in parts even welcome it, especially since geopolitical and economic goals (the encirclement and condemnation of Russia as a “rogue state”, but also the rescue of the troubled fracking industry) can be achieved, and in any case the Europeans are the main victims of this development. In the course of the negotiations in the so-called Normandy format, Berlin and Paris in particular could have used carrots and sticks to urge Kyiv to implement the 2015 Minsk Agreement. An agreement that the Ukrainian leadership promised to implement, but never even remotely considered. Why? That’s the big question. Was the US influence too great? Possible but not proven. However, when asked the “cui bono?” (Who benefits?) regarding these growing tensions, this would be a logical conclusion. Critics are already complaining that the true opponent of the United States are their allies.
The longer the current situation lasts, the greater the resistance in Russia itself will be, according to the Americans’ basic consideration. This could pave the way for a “color revolution” in Moscow and position a pro-Western leadership (like that of alcoholic Boris Yeltsin) that would entail the total sell-off of the world’s largest country’s natural resources to Western multinationals. But for these geostrategic goals, the Europeans now have to suffer – and dig deep into their pockets. Not only for expensive energy, but also for all supplies of weapons and humanitarian aid to Ukraine. And who knows how many billions of euros in aid money are still in that country ruled by corrupt oligarchs should seep away. And that while the US oligarchs are enriching themselves from the conflict by making a decent living from the gas and from all the US taxpayer-financed arms deliveries to the Eastern European country.