THE first whammy – the Covid-19 pandemic – is still with us, as no country has been successful in completely wiping out the Covid-19 virus.
The second whammy – the Russian-Ukraine war is still with us since February.
These two whammies have caused a disruption in the supply chain. Along with sanctions, they have caused soaring energy and food prices, resulting in a third whammy of galloping inflation globally, especially in EU countries.
The world is about to witness the possibility of a fourth whammy, which might just occur in the near future, in the form of an Israel-Lebanon war.
Let us first see what will lead to the fourth whammy.
When you use sanctions as a weapon against your enemy, it is indeed foolhardy to target your enemy’s product that you are heavily dependent on for sanction.
This is what the EU is doing on the instigation of the US when it sanctioned Russian oil.
It does not sanction Russian gas on which it is heavily dependent but with an arrogance that borders on stupidity, it went on to announce the bloc’s intent to reduce the import of Russian gas by two-thirds by the end of the year.
You are still heavily dependent on Russian gas and you have the temerity to announce this reckless bravado.
The West must take a leaf from Sun Tzu’s Art of War in that when you want to incur a fatal blow to your enemy, it must be done quietly even while you’re in a position of strength, lest your enemy knows of your move and makes a countermove behind your back, leaving you bleeding profusely.
To the Russia’s credit, it held a moral high ground by not cutting off its gas supply completely and immediately to the West despite this bold, arrogant but naïve bravado from the West.
Instead, it made a beautiful countermove by making it mandatory for the West to pay in rubles the gas that it has supplied, failing which the gas supply will cease.
And thus Poland, Bulgaria, Finland, Denmark and the Netherlands have had their Russian gas deliveries suspended after they refused a demand to pay in Russian rubles.
On June 17, Russian energy giant Gazprom cut gas flows through the undersea pipeline from Russia to Germany, which also served France, by as much as 60%, and by half to Italy and Slovakia and completely to France due to technical issues arising from Western sanctions against Moscow.
Leaders in Germany and Italy called the reductions a political move and it has escalated the energy tensions in Europe.
Some EU leaders have accused Russia of “blackmailing” the bloc with its oil and gas exports, and have blamed Moscow for soaring energy prices.
The Kremlin has rejected the claims, laying the blame on EU policies.
According to Gazprom, German equipment supplier Siemens Energy failed to return gas pumping units to a compressor station on time.
The repaired turbines for North Stream are currently stuck at a maintenance facility in Canada, due to Ottawa’s sanctions on Russia.
Siemens has said Germany and Canada are seeking a solution.
Kremlin spokesperson Dmitry Peskov said Russia remains “the most reliable supplier”, but the restrictions have made delivery technically impossible.
“From the technological point of view, the mechanical infrastructure of the pipeline is suffering because of the sanctions imposed by the EU.
“The pumping facilities, namely the turbines, have to undergo maintenance. But the turbines cannot be returned, that is, the Europeans are not returning them. There is simply nothing to pump with,” Peskov explained.
“This is a man-made crisis created by the EU. We have gas, it’s ready to be delivered, but the Europeans have to give back the hardware. And repair the hardware in line with their commitments.”
Gas prices normally fall with the end of the winter heating season, offering some relief to European utilities scrambling to refill underground storage to have enough to get through next winter.
But having enough for the coming winter is the key problem now for Europe because of the hefty cut in Russian supplies of gas.
It has hampered the EU’s attempts to refill its gas storage facilities, now about 55% full, to meet a bloc-wide target of 90% by November, a level that would enable the region to get through winter if Russian supplies were cut further.
The nail in the coffin for Europe is when Russia announced Gazprom’s Nord Stream 1 gas pipeline would not deliver natural gas to Germany for 10 days in mid-July as it undergoes annual maintenance.
It was confirmed early last month maintenance work would take place from July 11 to July 21.
Germany is concerned over the shutdown, fearing the flow of gas will not be turned back on.
In recent years, this shortfall was compensated by increased flows through Ukraine or Poland.
However, various officials and industry representatives feared Russia might not do that this time, leaving the continent to face gas shortages.
The impact of this shortage is reverberating in the economy. German chemicals major BASF may be forced to halt production at the world’s biggest chemicals plant in Ludwigshafen due to shortages of cheap and abundant Russian gas.
BASF has used Russian natural gas for years to generate power and as feedstock for products that make it into toothpaste, medicine, and cars.
However, dwindling Russian gas supplies are proving a threat to the company’s vast manufacturing hub, it said.
“Cutting down production at this site will be a huge task,” said BASF senior economist Peter Westerheide, as quoted by the Wall Street Journal.
“We’ve never seen situations like this before. It’s hard to imagine.”
Meanwhile, Dutch Climate and Energy Minister Rob Jetten warned on June 28 a gas crisis in any one EU country would provoke a domino effect and quickly spread throughout the bloc.
“It’s good if some member states can fill their gas storages by Nov 1, but if other countries fail to reach 80% – particularly big countries like Germany – then you have to be aware that this will be a domino effect for the whole of Europe,” Jetten told Politico magazine.
Last week, the nation lifted all restrictions on coal-fired power stations to reduce natural gas consumption, while making an “urgent appeal” to businesses to save as much energy as possible ahead of the winter season.
Besides the Netherlands, a number of EU countries have launched emergency plans aimed to lower and ration the use of natural gas and resurrect coal-fired power production, Business Insider reported on June 28.
The shift from EU’s coal-free “green energy” aspirations to the “dirty fuel” came after the bloc’s major gas supplier, Russia’s Gazprom, slashed deliveries by 60% last week through the Nord Stream pipeline.
This has made it more imperative for Europe to find alternative sources of gas, and here comes Israel to the rescue.
On May 16 a Turkish newspaper Yeni Safak reported deliveries of Israeli natural gas via Turkey by sea to Europe was mooted.
If this is agreed on, Turkey expected its ship will be on duty during transmission periods.
With this encouragement from Turkey, Israel’s interest in providing gas to Europe was first piqued on May 30 when it began the process of launching a fourth exploration for natural gas in its territorial waters.
A battle over Mediterranean waters rich in natural gas deposits bubbled up on June 5 with the arrival of the Israeli-contracted Energean Power’s floating production storage and offloading vessel on the maritime border between Israel and Lebanon.
Its arrival was met with anger in Lebanon, with both Lebanese politicians and citizens denouncing the move and threatening any activity in the area would be considered a “provocation” and an “act of aggression”.
Lebanese President Michel Aoun warned Israel that trying to tap the offshore riches without first resolving a territorial dispute would be seen as a “provocation”.
Lebanon’s Hezbollah has threatened to take action if Israel extracts fossil fuels in the disputed area without resolving the territorial impasse.
Although Israel has played down any prospect of conflict over the dispute, a naval version of Israel’s Iron Dome missile defense systems, along with submarines, will reportedly protect the rig.
It was also reported the Israeli military is readying for a possible attack by Hezbollah on the Energean gas rig.
Its navy vessels will help secure the drilling platform.
Also in a very aggressive mode, Israel Defence Forces Chief of Staff Aviv Kochavi on June 12 warned overwhelming force would be used in Lebanon during the next potential war with Hezbollah.
“We will deal very big strikes in the war, but we will warn the residents and allow them to leave the areas. I say to the residents of Lebanon: I advise you to leave, not only at the beginning of the war, but from the beginning of tension and before the first shot is fired. I advise you to leave those areas because the attack force will be unimaginable like nothing you have witnessed before,” Kochavi said.
“A house in which a missile is located or located near a missile, an activist who deals with a missile, a command headquarters that deals with a missile, or electricity connected to a group of missiles – all of this network will be hit on the day of the war.”
He also said the IDF has pinpointed thousands of targets in Lebanon to destroy in the event of a war, including Hezbollah headquarters, rocket-propelled grenades, and launchers.
Jamari Mohtar is the Editor of Let’s Talk!, an
e-newsletter on current affairs. Comments: letters@thesundaily.com
