The untamed desire of the Trump administration to impose all sorts of conditions and restrictions on the way that Europe operates is clearly leading to an abrupt increase in anti-American moods across various social layers of the European society. Practically speaking, there’s an avid hatred visible all across the EU towards Trump’s use of the ‘Al Capone approach’, which is typical for American businessmen who would try to brute force their way into foreign markets and influence them in any way possible.
Even before the European Union created a vehicle to bypass American sanctions against Iran last January, it was clear that Washington wasn’t simply trying to inflict maximum damage to Tehran, as many EU companies found themselves starring down the barrel of American gun. However, there’s no denying that the special purpose vehicle known as INSTEX (Instrument In Support Of Trade Exchanges) did come in handy, as German, French and even British companies can now do business with Iran while bypassing dollar completely or even without any direct transactions with Tehran. Before INSTEX was introduced, one had to remain mindful of the fact that the US State department was capable of tracing international transactions and blocking them, which meant that Europe had the challenge of dodging a curved ball every time it wanted to sell something to Tehran. But it seems that the EU has had enough of both the US-imposed dollar system along with Washington’s attempts to champion European foreign policy agenda.
It’s curious that INSTEX was designed in such a way that Berlin, Paris and London would share a collective responsibility for undermining Washington’s policies. And there was no easy way to go about it, as there were only two possible scenarios: the EU setting a precedent of collective disobedience to Washington or the Trump administration making every effort of bringing to heel the defiant nations by picking them apart and humiliating them individually.
Yet another important aspect of INSTEX is that through it the EU demonstrates its reckless resilience that would be kept hidden for a long while, together with its readiness to pursue an independent policy. However, the US hasn’t learned a thing, as it carries on sending its threats to the defiant capitals of Berlin, Paris and London “through the appropriate diplomatic channels.” Among those voicing those threats was the German ambassador to Berlin, Richard Grenell who invoked so much hatred around here that he has virtually become a persona non grata in Germany.
At this point, it seems that Washington is simply incapable of coming to terms with the reality. This fact manifested itself in the US House of Representatives passing a bill on European energy security (sic) and diversification regulating cooperation between the United States and Central and Eastern European countries.
The stated goal of this bill is “to prioritize the efforts of and enhance coordination among United States agencies to encourage countries in Central and Eastern Europe to diversify their energy sources and supply routes (sic), increase Europe’s energy security, and help the United States reach its global energy security goals, and for other purposes.”
But how much of American “generosity” can Europe really stomach?
The European Commission states that Washington will not be capable of supplying more than 8 billion cubic meters a year by 2023 via its LNG tankers. It is noted that this volume hardly surpasses 1.6% of the total gas consumption of the EU. For the sake of comparison, last year Gazprom’s share of the European gas deliveries reached 37%. It is also stated that out of the projected 119 billion cubic meters of LNG production capacity of the United States, no more than 7% will be exported to the EU, which constitutes a steady decrease from last year’s figures, when the EU imported 11% of the American LNG output. According to Gazprom Export, the demand for foreign gas on the European market may reach 40 billion cubic meters in 2023. However, there’s no visible force that can replace Russia’s Gazprom and Novatek in meeting this demand.
Last February, it was reported that Russian LNG supplied to Europe by Novatek could be much cheaper than its American competition: the company is capable of sustaining the price of 3.15 dollars per million BTU (British thermal units; 27.5 cubic meters), while the American LNG price cannot possibly go lower than 7 dollars per million BTU.
Thus, one thousand cubic meters (a standard transaction volume in gas sales) supplied by Novatek will only cost 109 dollars to the European consumer, which means that American competition is outpriced from the start, as it has no way of bringing its price any lower.
Against this background, it’s curious that the former US envoy to the European Union, Richard Morningstar let it slip that Washington is only fighting Russia’s Nord Stream – 2 gas pipeline project because its completion will mean a death sentence for Washington’s LNG ambitions. However, shale producers across the US are not willing to kiss their European aspirations goodbye, when Washington believes that those are advantageous to the US from a purely political point of view. It’s true than through exporting gas to the European Union, US shale producers would be able to raise domestic and export prices. It’s also noteworthy that at one point Trump promised to build up to 11 ports with LNG terminals all across Europe in order to import American gas through them. This notion was reinstated at the recent meeting between the sitting US president and Italia’s prime minister Giuseppe Conte.
As for the interests of such players as Russia and Europe, it should be recalled that in 2018 Russia began exporting LNG produced at Yamal LNG and immediately ranked second in the list of largest suppliers of liquefied gas to the UK. The British Department for business, energy and industrial strategy has recently revealed that the Qatar’s position of an absolute champion of LNG supplies to the Kingdom still remains uncontested. Last year, some 4.5 billion cubic meters of liquefied gas was supplied from this Middle Eastern country, which amounts to 54% of the total LNG imports of the UK. However, Qatar’s share of the market last year decreased by 2 billion cubic meters, and the launch of Yamal LNG played a significant role in this. In 2018, Russia ranked second in the list of LNG suppliers to the UK. If in 2017 there was no LNG supplies from Russia at all, a year later it managed to ship some 1.44 billion cubic meters, which amounts to 17% of all British gas imports. Trinidad and Tobago ranked third with its share of 10% of the market, with the United States barely reaching fourth place with its 6%.
From this example alone it’s clear that Russian gas will remain much more competitive on the Europe market than any American initiative. At this point it’s irrelevant what bills the Capitol Building would be inclined to adopt in a desperate bid to twist the hands of European politicians, as those gangster practices have clearly overstayed their welcome. All that this tactics can achieve is the growth of anti-Americanism in Europe! After all, it’s not up to American bills to tell you who is going to be your partner and who’s not, as it’s up to your own wallet to decide.
Of course, Donald Trump still has his “ultimate argument”: the decision to impose sanctions on individual European states instead of companies, but the backlash he’s going to face at home for this course of action is going to be enormous. Moreover, European leaders will be entitled to provide any kind of response, and this response will allow them to score even more political points with the common people, as anti-American sentiments across the EU have become really widespread.
Grete Mautner is an independent researcher and journalist from Germany, exclusively for the online magazine “New Eastern Outlook.”
Source