Energy Expert for Al-Estiklal: Biden Is Taking Advantage of Europe's Crisis and Will Reconcile Riyadh After the Elections

Director of the Center for Energy Information and Studies in London, Dr. Mustafa al-Bazarkan, confirmed that American companies took advantage of Europe's need for oil and gas and raised their prices significantly.

In an interview with Al-Estiklal, Dr. al-Bazarkan added that American opportunism led the oil and gas companies to direct production to Europe to obtain double prices instead of the internal selling markets.

Dr. al-Bazarkan pointed out that Germany is the most affected by the current crisis, as it used to buy Russian gas through pipelines at $4 per million British thermal units and is now buying it at about $52.

Regionally, the international expert explained that Turkiye's geopolitical position will make it a gateway for the passage of Russian gas to Europe, as well as gas from other sources such as Iran, as well as in the near future from the eastern Mediterranean reservoirs.

He also indicated that once the US midterm elections take place in November 2022, we will see US attempts, whatever the results, to heal the rift in relations with Saudi Arabia against the background of the recent OPEC+ decision.

About a month before the fateful midterm elections of US President Joe Biden and his Democratic Party, the OPEC+ alliance led by Saudi Arabia and Russia decided, on October 5, 2022, to reduce oil production by two million barrels per day, which caused a great international uproar.

 

Europe Crisis

 

• What is the future of the current energy crisis, and how will Europe face the cold winter in light of the current situation?

Dr. al-Bazarkan: The current energy crisis in Europe was imposed on it by an American strategy to rid the old continent of dependence on Russian oil and gas.

However, it was not on the table before the war in Ukraine, and there were no European attempts to find an alternative because that is not easy.

The countries of the European Union filled their reservoirs of natural gas and were able to obtain quantities of liquefied natural gas (LNG) at the present time and approve an imminent agreement to purchase gas collectively among themselves.

The coming winter could prove to be a bottleneck if Europe manages to get through it and will be able to provide alternatives to Russian oil and gas.

 

• What are the repercussions of the energy crisis on the political, economic, and social conditions in Europe with the continuation of the Ukrainian war?

Dr. al-Bazarkan: It is clear that higher energy prices were an additional reason for inflation to rise to levels not seen in Europe in 40 years.

In Germany, since the end of World War II, gas prices have increased four times, and it is most affected in Europe.

Germany is the locomotive of the EU, and it used to buy Russian gas through pipelines at $4 per million British thermal units, but after the Ukraine war, it bought it at $52 per million British thermal units.

Germany does not have any liquefaction plant to deal with alternative gas (LNG).

With high levels of inflation in Europe and high food prices, protests and strikes have increased, denouncing what the European citizen is bearing; because of all this, the economy may enter a recessionary phase that corresponds to inflation, to be the cause of a dangerous economic phenomenon, which is stagflation.

 

 

Regional Lines

 

• What is your reading of Turkiye's offering as an alternative to the transit of Russian gas to Europe after the Nord Stream line was blown up?

Dr. al-Bazarkan: Turkiye is acting as a rough mediator between Russia and Ukraine. The Turkish role has been a welcome one in exporting Ukrainian grain and fertilizer.

The West is in need of oil and gas from any available source. Before the Ukraine war, Turkiye was a gateway for the supply of gas and oil. Now it can be a gateway to energy sources.

I think that Turkiye's geopolitical position and its international relations will make it a gateway for the passage of Russian gas, as well as gas from other sources such as Iran, as well as in the near future from the eastern Mediterranean.

 

 

• What are the implications of the recent Turkish–Libyan memorandum of understanding on the Mediterranean gas crisis?

Dr. al-Bazarkan: Oil and gas can sometimes be a curse and cause wars and military conflicts in different regions of the world.

They can also be a blessing in establishing security and stability in order to enjoy the huge financial returns from the selling prices of oil.

In this tense atmosphere, any agreement that takes place in the eastern Mediterranean is an opportunity for the gas or oil-producing countries because Europe is in dire need of energy.

Therefore, Europe will offer what it can offer to achieve agreements that guarantee sources that supply it with the energy it needs.

 

• Does the demarcation of the border between Lebanon and 'Israel' contribute to solving the eastern Mediterranean gas crisis?

Dr. al-Bazarkan: The maritime border demarcation agreement between Lebanon and "Israel" came after bilateral disputes for more than 10 years, which witnessed the rejection of both sides.

Therefore, this agreement means bilateral recognition of the other and lays the basis for the demarcation of the land borders in the future and for peace relations between the two countries.

As for the economic return, it takes years for the gas to be extracted and sold and for Lebanon to obtain its financial return.

 

 

Saudi–US Relations

 

• How do you see the decision of the OPEC+ alliance led by Saudi Arabia to reduce production, contrary to the American desire?

Dr. al-Bazarkan: There is no doubt that the thing that angered the US administration is that the decision came before the midterm elections in the country, which predicts the decline in the popularity of President Joe Biden and the Democratic party.

This prompted the US president to accuse OPEC+ of working for Russia, forgetting that Moscow was originally a member of OPEC+, and the decision must come in its favor and in the interest of all member states of the alliance.

It is evident that the position of OPEC+ stems from the interests of the member states, in addition to a proactive future reading of what the oil markets may witness from the decline in demand due to inflation and economic stagnation in light of the continued closures in China.

Although some tension erupted in relations between Riyadh and Washington, which was provoked by President Biden's statements, once the midterm elections take place, whatever the results are, we will see American attempts to heal the rift in bilateral relations.

 

• How do you see accusing Saudi Arabia of abandoning its Western allies?

Dr. al-Bazarkan: President Biden was surprised by the Saudi position, and he must reconsider his previous positions and expectations through a new understanding of relations with Saudi Arabia.

 

 

• Could these events cause disruption to the global energy market?

Dr. al-Bazarkan: OPEC+'s preemptive decision did not, as the US expected, cause a significant increase in prices. However, oil prices are now at the same level as before the decision to cut.

As a reaction, Biden's decision to release quantities of the US oil reserves came to reduce gasoline prices in order to gain and enhance his popularity among American citizens before the elections, nothing more.

 

• What is the truth behind the accusations against Washington of taking advantage of the energy crisis in order to sell shale oil and provide gas to Europe at double prices?

Dr. al-Bazarkan: The accusations that the United States sells shale oil and provides energy to Europe at double the prices at which they were getting Russian gas and oil are all true.

In addition, more than one European official confirmed these accusations against Washington; American companies took advantage of Europe's need for oil and gas and raised their prices significantly.

For example, natural gas is priced at $6 per million British thermal units and liquefied at the cost of $4, plus the cost of shipping to Europe at $6, but it is sold at $40 or more.

It is also noted that American oil and gas companies direct their production to Europe to obtain double prices compared to internal selling prices.