Every company and consumer uses a supply system and often times if the organization has a long history of reasonable good service, both sides are satisfied to keep the relationship going or renewing on a regular basis. When the relationship was entered into, both sides believed the service they were getting was fair. It is the same with countries, they try to do what is good for their citizens. In the case of Europe, after the Berlin Wall fell, European countries agreed to buy Russian oil and gas and in many countries the percentage that Russia supplied reached 40%. The system worked well until Russia decided to invade Ukraine and European fearing Russia’s possible next move imposed sanctions on Russia. Most people thought Russia would find a way to retreat or save face or not continue the invasion since they were losing or had not accomplished whatever objectives they set out to do.
In an article by Susanna Twidale of Reuters, Europe has accused Russia of weaponizing energy supplies with the result prices of natural gas have increased 400% and winter is coming. Russia through Gazprom sends gas to Europe through the Nord Stream 1 pipeline and it has been running at 20% capacity. Russia blames Western sanctions and technical issues for supply disruptions. The technical issues including somehow the people at Gazprom have forgotten up to keep the pipeline running, because the pipeline is slowed down for maintenance issues. Russia forgets other countries including Germans know how to run pipelines.
Since the invasion, all the European countries have been looking at other options and suppliers, but gas is moved by pipelines and it is hard to change pipelines and refineries to fit other countries. Germany which had pledged to shut down nuclear facilities have extended their lives.
Klaus Mueller, president of the Federal Network Agency regulator, said in August that even if Germany’s gas storage were 100% full, they would be empty in 2.5 months if Russian gas was completely halted.
Linking to dividend paying stocks, all companies have supplier relationships and one hopes that they are long lasting and each company helps the other to be able to help each other in times of crisis. When you look at your investments, do you see good relationships?
There are more questions than answers, till the next time – to raising questions.