Record-high energy prices in Europe may initially help Russia convince the European Union to accept the Nord Stream 2 pipeline and pressure European utilities to sign long-term contracts with state-run gas giant Gazprom. But the crisis ultimately risks encouraging European states to further reduce their reliance on Russian gas. In recent months, calls that Russia has been manipulating the European gas market by withholding supplies for political ends have increased in tandem with European electricity and gas prices. While Europe’s historic energy crunch is the result of numerous factors, reports suggest that a Kremlin-coordinated effort by Gazprom to withhold supplies is part of the problem. Indeed, European governments have made similar accusations several times over the past two decades. But regardless of the merits of the current accusations, Gazprom will seek to exploit the high price environment and is well-positioned to benefit from the gas shortage. ...
