Putin is finally going to strike after three weeks of talking Putin has demanded that the gradual increase in European gas supply begin on November 8

After three weeks of talking about supplying EU countries with extra gas, Russian President Vladimir Putin has finally determined the time to act.

According to Russian news agencies and other media reports, at the meeting on Wednesday local time, Russian President Putin informed Alexey Miller, CEO of state-owned enterprises and domestic gas giant Gazprom:

"As soon as the delivery of natural gas to the domestic underground storage facility is completed on or before November 8, the gradual increase in natural gas reserves in the European underground storage facility will begin as planned."

Putin pointed out that the situation in the energy market is very volatile, and that Europe's natural gas reserves are significantly less than five years ago, so he instructed Gazprom to increase gas reserves at underground gas storage facilities in Austria and Germany. Such actions, he said

"It will enable you to meet your contractual obligations steadily and rhythmically, supply gas to your European partners in the autumn to winter period, and create a more favorable situation in the European energy market."

Putin said that Europe is cutting down on natural gas, the United States is reducing supply to the European market, and Gazprom can make up for Europe's gas shortage, and the supply is more than the United States has withdrawn from the European market.

On Wednesday, European gas futures did not hear about the reversal of the decline, British natural gas fell more than 1%, two consecutive days, Dutch gas fell more than 4%, giving back all of Tuesday's gains.

Putin's statement is undoubtedly good news welcomed by Europe, but more serious problems are in front of us, since this year, the price of natural gas in Europe has soared 6 times, and this autumn in just one and a half months rose nearly 5 times, resulting in a 3-fold increase in electricity prices in parts of Europe. The historic energy crisis has pushed electricity prices to record highs, and markets are still worried that this year's cold winter will worsen the situation.

Wednesday's speech was the rough timing of Putin's first explicit action since early this month expressed an interest in increasing natural gas supplies. In the past two weeks, the media and Putin himself have more than once voiced the wind, using European approval of the Nord Stream 2 gas pipeline as a precondition for increasing supply.

On the 6th of this month, Putin said that Russia is ready to stabilize the energy market at a time of soaring prices and will increase the supply of natural gas to Europe. On the same day, European and American natural gas futures surged intraday. European natural gas, which rose nearly 40 percent in early trading, fell more than 10 percent a day, falling from an all-time high; U.S. gas, which was at its highest level since the 2008 financial crisis, also gave back more than 2 percent of its intraday gains, falling more than 10 percent, its biggest drop in a year.

A week later, Putin said Russia was ready to supply Europe with the gas it needed, but did not say when to act but criticized the continent for introducing "systemic flaws" in its energy system, and then "shirked responsibility" when problems arose, saying that European customers did not sign long-term contracts in advance, but instead tried to fill the lack of gas storage caused by the aging of gas storage facilities in European countries through short-term market supply.

The media was quick to point out signs that Russia's gas supply to Europe next month remained limited. Gazprom, Europe's largest supplier of natural gas, has not booked additional capacity for gas routes to Europe via Ukraine in November, nor has it increased the volume of gas to Germany via Belarus and Poland.

On Tuesday, the media quoted sources close to the Russian government and Gazprom as saying that Russia wants everyone to know that Europe will exchange with Russia in exchange for an increase in natural gas supply - Nord Stream 2 is approved by Germany and the European Union. A day later, Putin said that as long as Germany approves the new Nord Stream 2 gas pipeline, Russia can increase its gas supply to Europe, an increase of about 10% of the total gas shipped to Europe and Turkey last year, and stressed that Russia is in a position to help solve the continent's energy crisis.

In fact, Russian officials such as Putin have previously hinted that Germany's approval of the launch of the Nord Stream 2 pipeline and the willingness of companies to sign more long-term contracts are key to increasing supply.

Nord Stream 2 departs from Usti luga in Russia via the Baltic Sea, bypasses Ukraine and Poland, and reaches Lubming in Germany, with a total length of 1200 kilometers. The gas pipeline has been completed, but is still awaiting regulatory approval before it can begin supplying 55 billion cubic meters of natural gas to Europe each year.

Wall Street Insights recently pointed out that it is not easy for the EU to give the pipeline a green light amid rising geopolitical tensions. The United States and Eastern European countries of Poland and Ukraine oppose the pipeline. Critics say the new pipeline does not pass through Ukraine, which Russia wants to use as a geopolitical weapon to increase the EU's dependence on Russia while losing Ukraine gas transit revenues from its traditional supply routes.

This article is from Wall Street Insights, welcome to download the APP to see more