Putin’s Secret Weapon Gazprom’s Dominance on Europe’s Energy Future
since the hostilities began in Ukraine
the European Union has imposed multiple
sanctions that restrict the flow of
Russian money and goods the sanctions
have targeted Russian Banks and
companies across all sectors except for
one almost all the countries in Europe
rely on natural gas for energy and more
than half of its Supply comes from the
world’s largest natural gas exporter
Russia to understand Russia’s power over
the supply of natural gas in Europe
let’s first take a look at the biggest
economy in Europe Germany
Germany uses natural gas for heating
more than 20 million homes and for
powering the vast majority of the
country’s industrial sector Russia
delivers the vast majority of its gas to
Europe through a network of pipelines
and the most important pipelines are
connected directly to Germany since the
invasion of Ukraine began Germany has
paid Russia more than €220 million EUR
every day for natural gas supply the
German government even spoke out against
the sanctions that would limit the flow
of gas from Russia and so did countries
in Central Europe that still depend on
natural gas the root problem is that
every payment the European countries
make to the Russian state owned Natural
Gas Corporation the funds are indirectly
paying for Russia’s war on Ukraine how
did the European countries become so
dependent on Russia for their energy
Supply and what’s stopping them from
changing over to alternate
sources piped natural gas is a lot
different than your regular energy
sources while it is one of the three
main fossil fuels used around the world
along with with coal and oil it can be
easily shipped or freely rerouted
wherever required it is a regional
product that depends on proximity to
transport it gas producers spend
millions of dollars to build specialized
pipelines that connect the supply to
their buyers and because these pipelines
are such huge expensive and permanent
commitments all gas deals are inherently
longterm it directly links the buyer’s
energy infrastructure to the supplier
for decades it’s pretty typical for
economic and Military analysts to look
at energy and how it can often be a
source of conflict Russia’s energy
dominance is an area of concern that
NATO analysts have certainly been
looking at for the past several decades
natural gas gets used for producing
electricity gets used for heating it’s
the basic element that gets used to make
Plastics to make fertilizers it’s the
lifeblood of a lot of industrial
economies the whole energy situation
began during the Cold War at the center
of the ideological divide was Germany
which was split in two with a fortified
border separating independent Democratic
West Germany from Soviet East Germany
and other Soviet
Satellites even through the tough times
following the second world war by the
1950s West Germany had experienced a
remarkable economic recovery the steel
industry in Germany was thriving but
there was one issue they desperately
needed a solid supply of energy to power
their growing economy at the same time
huge natural gas reserves were
discovered in Western Siberia and the
Soviet Union had suddenly become the
world’s largest natural gas producer
they had established a network of
pipelines to supply all the major Urban
and Industrial regions across the Soviet
Union but there was more potential to
dominate the supply to customers in
Europe however this would be a huge and
expensive infrastructure project and the
ideological divide prevented the scope
of any business the whole picture
changed in 1969 when Willie Brandt was
elected as the chancellor of German
he introduced a new foreign policy
called OST politic that changed the
scope of business and economy across
Europe bringing both ideological sides
closer through discussion and Deals this
was a huge opportunity for Germany to
obtain energy from Russia and for Russia
to enter business with Europe West
Germany and the Soviet Union struck a
deal where the Soviet Union would Supply
West Germany with natural gas and in
return West Germany would provide
highquality steel pipes to fortify and
extend the the pipeline Network this was
a major project that would take a decade
to complete and the deal would last for
several decades after for the Russians
this deal was basically about hard
currency that they needed because their
economy was faltering and they needed
the money from the West to keep the
whole show going as the 80s rolled
around the Soviet Union had completed
the massive pipeline Network to Europe
going through Ukraine and Czechoslovakia
and by 1990 it was supplying Germany
with 40% of it its gas helmet Schmidt
Brandt’s successor as the German
Chancellor also turned to Siberian gas
and during his visit to Moscow Germany
signed another gas trade contract valid
until the year 2000 Schmidt defended his
decision and deflected US President
Jimmy Carter with the words trading
partners don’t shoot at each other
effectively a member of NATO was
providing the Soviet Union with hard
currency that they were using to
strengthen their military forces the the
major concerns on the American side were
about dependence that the Soviets would
use energy as a political and economic
weapon and that it would put Europe and
Germany in a position where it could not
stand up to the Soviet Union and
henceforth this was all seen as part of
an overall Soviet strategy to weaken the
west and to break up NATO the situation
in Poland then reached a boiling point
in
1981 amid fervent protests from the
solid arnos or solidarity Trade union
the government had imposed martial law
the recently elected US President Ronald
Reagan reacted immediately by imposing
sanctions to disrupt Russia’s natural
gas trade the sanctions were neither
effective nor well accepted by the other
NATO members and created a divide
between the Allies Soviet Union ignored
the sanctions and the new pipeline to
Germany was built anyway they were
playing the capitalist economy at their
own game American businesses started to
oppose the sanctions themselves since
the US was also selling components for
the project and their argument was that
if American businesses couldn’t sell
these parts then their competitors in
Europe would sell the equipment so in
the end America had to shelf the
sanctions as if they were never imposed
in the first place at this time Vladimir
Putin was being trained as a KGB agent
when he was pursuing a law degree he
caught the attention of the KGB and was
asked to join on
graduation for students in the Soviet
Union an offer from the KGB did not have
the option to refuse after training
Putin worked in the first Chief
directorate where he would be tasked
with monitoring foreign officials in
Leningrad for the KGB this meant not
just keeping tabs on potential spies but
also running surveillance and
discovering any potential opportunities
for blackmail or
exploitation he was then sent to East
Germany in 1985 as a case officer Putin
became a regular KGB presence in Dresden
and regularly showed up at meetings of
the East German Security Service the
stazi it was his time in East Germany
that made him realize the value and
power that the Soviet Union could hold
over Europe through the natural gas
trade Putin was representing a powerful
state that was keeping the East German
economy afloat with its cheap oil and
gas natural gas was very closely related
to quality of life and to the provision
of essential Services allowing schools
and hospitals to function the cheap
energy that the Soviet Union was
providing to its eastern European
satellites was basically a subsidy to
keep their economies going and to to
keep them tight in the Soviet orbit
Russia was even using oil and gas as a
disciplinary measure within the Warsaw
Pact Whenever there was conflict such as
the uprisings in Hungary and
Czechoslovakia in 1968 Moscow had sent
tanks to Czechoslovakia and supplied
less oil and gas to intimidate them
using oil and gas dependencies as an
economic and political weapon was the
most favorable course of action in the
Warsaw Pact Russia would offer very
favorable oil and gas contracts and in
return they expected Unbound loyalty to
Soviet
interests however in 1989 East Germany
was on the brink of collapse as the
Soviet Union continued to demand high
prices for oil and gas which the country
could barely pay it slid deeper into
crisis however the whole world was about
to change again in
1991 when the Berlin Wall was brought
down uprisings began to spread across
Eastern Europe which was under the
control of the
USSR the Soviet Union had collapsed and
ultimately was dissolved into 15 new
countries including Russia the early
’90s were turbulent times for the
recovering Russian economy as the
economy was opened up to investors
Russian natural resources were passed to
an Elite Class of extremely rich
individuals called oligarchs in highly
dubious privatization auctions Western
investors also joined the ride to claim
a chance at high profits due to the
immense reserves of all raw natural
resources in Russia while the the
Russian people scoured empty
supermarkets for food and lived in
poverty through freezing Winters
International investors were ringing up
cheap Russian companies especially those
in raw
materials one of the companies in
speculation was the former gas Ministry
renamed gazprom in 1989 which had become
a corporation since
1992 gazprom was the most undervalued
company in Russia at the time because it
was always discussed as a corrupt body
where the assets were being stolen out
of the company siphoned off and given to
friends and relatives of Senior
Management this was all part of the plan
to solidify State control over natural
gas and prevent foreign investor
interference all part of the plan of one
genius in the later years of the Soviet
Union One businessman had changed the
scope of Russia’s influence over Europe
Victor stepanovich chernomen was born in
1938 to a family of poor laborers as
soon as he finished school he had to
look for work to support his family and
took up a job as a mechanic at an oil
refinery the youngster decided to join
the Communist Party of the Soviet Union
in order to live a better life even if
it was by a small margin for a better
position in society he decided to enroll
in the Samra polytechnical Institute but
performed extremely poorly in the
entrance exams he was admitted only
because there was no
competition graduating in 1972 Victor
began his career as a politician and was
assigned as the Director of the new
Natural Gas G refining plant in orenburg
he rose through the ranks in the decade
and in 1985 he was appointed as the
minister of the natural gas industries
of the Soviet Union chern Miran was
responsible for the exponential growth
of the natural gas Industries in the
Soviet Union in August 1989 under the
leadership of chernomen the ministry of
gas industry was transformed into the
state gas concern gazprom which became
the country’s first ever state-owned
corporate Enterprise and chernomen was
elected as its first chairman when the
Soviet Union collapsed gazprom had
effectively taken control over all of
the Soviet gas pipelines the company was
still controlled by the Russian state
but similar to other corporations in the
new economy now the control was
exercised through shares of stock
gazprom had begun to distribute shares
under the voucher method where each
Russian citizen received vouchers to
purchase shares of formerly state-owned
companies by 1994 33% of gazprom’s
shares had been bought by 747 th000
members of the public mostly in exchange
for vouchers 15% of the stock was
allocated to gazprom employees while the
state retained 40% of the shares here’s
the interesting part as chern Miran was
the Prime Minister he used his authority
to make trading of gazprom’s shares
heavily regulated foreign investors were
prohibited from owning more than a
collective 9% of shares while the
interests of employees and Russian
citizens were just a facade ultimately
the Russian State retained 100% control
over
gazprom however the maps had been
redrawn and many reserves were lost to
the newly formed independent
republics assets of the former Soviet
state in the gas sector were transferred
to newly created National companies such
as NAFTA Gaz in Ukraine and turkman Gaz
prom in
Turkmenistan fortunately the largest
reserves were still in Russian territory
and gazprom kept all those assets giving
Russia a prime Advantage for securing a
monopoly in the gas sector there was
another problem however the main
pipelines that transported natural gas
from Russia to Europe now ran through a
newly independent Ukraine putting a key
part of their gas infrastructure on land
they no longer controlled but chero
Miran had the solution the first
President of Russia Boris yelton had
recognized the business Genius of
gazprom’s chairman as a competent leader
and appointed chernomen as his prime
minister in 199 2 with him having more
authority over the gas concern gas prom
became one of the backbones of the
country’s economy in the 1990s
influencing the growth of the Russian
economy in the 2000s gazprom became the
largest extractor of natural gas in the
world and the largest Russian company it
all started with a basic plan to
diversify the pipeline routes to Germany
and to build new ones while making a
central unit in Germany in 1999 they
finished a pipeline project that ran
through bellarus and Poland and in 2005
they began building the infamous
nordstream pipeline along the Baltic Sea
to reach Germany directly over a
distance of 1200 km with a transport
capacity of about 110 billion cubic M of
natural gas every year they also
established their Central Europe
stronghold by building pipelines inside
Germany and opened a subsidiary company
to operate gas storage facilities in the
country Russia now had three routes
reaching Germany as well as pipelines
and storage facilities inside Germany
leading to other countries the gas trade
was strong but it had also started to
change Russia’s relationship with the
rest of Europe Vladimir Putin became
president of Russia in the first year of
the New Millennium he had established
connections throughout the state and his
plan was already in action there were
major things that had to be done and the
first on the agenda was to solidify the
power that the Russian government had
over Industries in this way he took
control of the nation economically
Company by company position by position
even When Vladimir Putin Rose to power
chern mirin was still in charge of the
energy and gas concerns of Russia in May
2001 Vladimir Putin appointed chomin as
the ambassador of Russia to Ukraine and
on the other hand fired the then CEO of
gazprom REM yachiru who was known for
stealing assets and distributing them
among his relatives Putin wanted
absolute control with no coruption
possible he appointed one of his
associates from his early days in the
mayoral office of St Petersburg as the
new boss of gazprom however he was not
the true boss gazprom had become a state
puppet and the decision power was
secretly given to chern Oman another
associate of Putin who was The
Mastermind behind the natural gas
business the appointment of chern Oman
in Ukraine was interpreted by some
Russian media agencies as a move to
distance chern Miran from the center of
Russian politics however this was an
outstanding economic move as Ukraine’s
natural gas reserves were close to
depletion which meant Ukraine would soon
rely on Russia for the natural gas
demand and chernomen was the perfect
person to negotiate the energy
concern this was all part of Putin’s
plan to categorically take over the
Ukrainian territory ever since the
nordstream 1 Project was announced the
intentions were clearly visible from the
very start it was a project aimed at
allowing the Russians to play hard ball
against Ukraine urad in Ukraine was one
of Europe’s most important gas hubs
where the main pipeline to Europe passed
through in Putin’s mind these pipelines
were not something that Ukraine had
built it was something that the Soviet
Union had built and they should have
been the ones in control since Putin did
not have leverage at this point without
suffering losses in revenue from Central
Europe the only solution to this
situation was to go around Ukraine and
build pipelines that ultimately
eliminated the dependence of the gas
trade on Ukrainian territory
in July 2006 gazprom was given the
exclusive right to export natural gas
from Russia chernomen strategy was first
tested out in Belarus on the 1st of
August 2007 gazprom threatened bellarus
with a stoppage of their gas flow if
they failed to pay off their debts
further stating that if so happened when
the supply was reinstated they would
experience a 300% price increase within
2 days Russia received assurances of
significant progress towards payment
within the next week it was not a
surprise when at the end of 2008 gas
price negotiations between Russia and
Ukraine fell apart on the 11th of
February 2008 gazprom had followed up on
the chern Oman strategy and threatened
Ukraine with a stoppage of gas flow
after almost a year of negotiating in
January 2009 the threat was executed on
the coldest day of the year Ukraine
Poland Romania and Austria froze and the
200 9 Russia Ukraine gas dispute began
Russia had cut off the gas to Ukraine
for 20 days on a larger scale because
Ukraine was the first country along the
major Transit pipeline to Europe when
Russia cut off their gas they cut off a
lot of European countries too as a
result all these countries saw a massive
drop in their supply and tens of
thousands lost heat in southern Poland
at least 11 people froze to death where
temperatures reportedly dropped to under
minus 25° C
even if the supply was restored and
Russia restarted pumping gas it would
take a minimum of 30 hours to reach
Ukraine and then a further 36 hours to
reach the next European countries like
Slovakia and Poland this meant that it
would be at least 3 days before normal
gas supplies could be restored all this
put Europe on alert it had become clear
now that through the supply of natural
gas Russia held immense power over
Europe in February 2009 turn amiran
again strained the relations between
Ukraine and Russia when he expressed
openly in an interview that it was going
to be impossible to come to an agreement
on anything with the Ukrainian
leadership on the other hand Ukraine’s
Ministers of Commerce and energy stated
that gazprom’s asking price of $450 per
1,000 cubic met of natural gas was
unacceptable and exploitative chern
Miran had accomplished his mission and
in June 2009 was relieved of his duties
as Russian Ambassador in Kev and was
appointed as a special presidential
economic
adviser at one of his final public
statements Chiran stated that Russia
should not apologize to Ukraine over
voicing its suspicions about Ukraine
being unable to pay for its natural gas
and further stated that Russia wants
Ukraine to pay for the gas it consumes
and hence Russia is right to be
concerned about the solvency of the
Ukrainian State tragedy struck on the
third of November 2010 when Victor
chernomen died after a long illness his
funeral was attended by Vladimir Putin
and chern Oman was commemorated for his
effort towards Russian economic growth
through a Russian State postage stamp in
2013 in early 2014 Russian soldiers with
no Insignia took strategic positions in
the Ukrainian territory of Crimea and
the region was annexed Russian
separatist movements started all over
Ukraine and Putin denied being actively
involved in the uprising russia-backed
separatists captured the regions of
donet and luhansk and declared them
independent
in response to the hostilities the
European Union issued a series of
sanctions on Russia some countries even
began to wean themselves off Russia’s
gas but the Russian natural gas flow to
Germany could not be stopped so easily
in fact Germany imported even more gas
than ever before the problem was that
replacing Russia’s natural gas as the
primary energy source across the country
was not easy because it has been piped
to homes and businesses for decades and
linked with heavy Investments and
infrastructure
without a major overhaul Russian natural
gas can only be replaced with other
natural gas and Central Europe’s options
for that are limited since the gas from
Algeria and Libya as well as the gas
from Asia Minor that travels through the
pipelines in Turkey is used in southern
European and Balkan countries most of
what is pumped to Europe goes to Italy
and Spain and besides the pipelines are
not transporting as much as expected the
alternative option for energy that can
be utilized with the same infrastructure
is liquefy natural gas or LNG that’s
natural gas that’s been cooled down
until it turns into a liquid form this
can be transported in Vats or containers
on ships from anywhere in the world
however it is a time and labor intensive
process that requires a lot of new
infrastructure making it an expensive
option gazprom has been accused of being
a political and economic weapon of
Russia using the supply and price of
natural gas to gain control over Europe
a decade after chern oman’s passing his
strategy is still used to ensure the
Russian economy is always at its peak in
the wake of the 2022 Russian invasion of
Ukraine gazprom had issues with many EU
countries it stated that it would cut
off supplies to French energy supplier
Oni over failure to pay in full for
deliveries Russia charges European
countries heavily for their energy
provisions and uses the same funds for
military policies in Ukraine in other
words European countries are paying for
the war that they are advocating as an
atrocity and yet they cannot do anything
to stop it in 2005 The Economist a
well-known British news magazine
published an article titled Putin’s
Arsenal the article stated that Putin
had two means at his disposal to restore
Russia’s former influence nuclear
weapons and natural gas Putin’s
government had been making significant
investments in the country’s nuclear
Arsenal and increasing its Reliance on
natural gas as a source of energy at the
same time these have turned into the two
main tools for coercion leverage and
influence over other nations Russia had
the upper hand in economic transactions
the demand for natural gas will remain
constant without a regard to its price
given the choice between a cold dark
home and shutting down Industries or
paying exorbitant prices Europe will
take the latter choice and Putin’s cash
flow will never cease
Putin’s Secret Weapon: Gazprom’s Dominance on Europe’s Energy Future
Discover the intricate dynamics of Putin’s Secret Weapon: Gazprom’s Dominance on Europe’s Energy Future in this revealing documentary. Explore how Russia, under Vladimir Putin’s leadership, has leveraged Gazprom, the largest natural gas company in the world, to assert its dominance in the European energy market. Delve into the geopolitical strategies and economic implications of Russia’s energy exports and understand the complex relationship between Europe’s dependency on Russian natural gas and the broader political tensions. This documentary sheds light on the critical role of energy in international relations and the far-reaching impact of Gazprom’s influence on Europe’s energy security.
Since the hostilities began in Ukraine, the European Union has imposed multiple sanctions that restrict the flow of Russian money and goods. The sanctions have targeted Russian banks and companies across all sectors except for one.
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