The Duran Podcast - EU prepares to launch energy war

Episode Date: January 1, 2025

EU prepares to launch energy war

All right, Alexander, let's talk about what is going on with the energy crisis in the European Union. We have this big row between Fizzo and Zelensky, Slovakia, and Ukraine, over the gas transit from Russia, from gas prom, transiting via Ukraine into the European Union, specifically into Slovakia. money which Ukraine gets paid for, by the way. Gasprom pays Ukraine for the transit of this gas. And the narrative is that Zelensky wants to cut off this contract with Russia. But obviously, Zelensky doesn't do anything unless he has orders from high above to cut off the gas. And the question is, why? Who is giving these orders and why? I imagine it's the EU. Maybe it's even forces above the EU that are telling the EU to tell Zelensky to cut off the gas deal with Russia and the gas transit to Russia.

But why? Why do they want this to happen? Is it about cutting off, completely cutting off any type of Russian energy to Ukraine? Is it about creating an energy crisis, an energy war? Is it about inflation, causing prices to increase? Why do they want that? Why would they want that, the European Union? Does it have anything to do with the United States and Trump?

And Trump's requests that the European Union exclusively, well, I don't know if he said exclusively, but buy more LNG from the United States or else he's going to place tariffs on the European Union. What is going on here? Why are there forces above Zelensky? ordering him to cut off the gas transit via Ukraine? Well, the first thing to say is that it is to some extent an influence that there are forces

of Brazzolensky because, of course, he's claiming it his decision, he's a sovereign leader, a sovereign country, which is Ukraine. He makes all the big decisions. A sovereign democratic country. A sovereign democratic country that is Ukraine, and he makes all that these decisions. because it's the entirely correct and proper thing for Ukraine to do. After all, you can't have the gas of your great enemy, the Afonan, the adversary, Russia crossing your country, even though it supplies your people with gas.

And I think that's something we need to explain. And it also provides you with money at a time when your financial position is powerless as well. A significant amount of money. what I understand. A nice part of the GDP of Ukraine. Absolutely. Sir, why is this happening? Well, I think the first thing to say is if you put all the pieces together, at least part of the answer lies in Brussels. Now, I ought to say there's been some questions being asked

at some of the media outlets who've tried to follow this story. very few have come to, have asked the commission, and they've asked them, you know, what you know, that this problem is arising. Energy reserves, gas reserves in Europe are falling very fast, much faster than last year. Gas prices are rising. It looks like the winter is going to be very cold. Level of demand suppression in Europe is not keeping. pace with the decline in supplies of gas. And the European Commission came back, is coming back and is telling everybody, don't worry, we have the whole situation completely under control. We've known for at least a year that we were going to reach this point that the transit

agreement between Russia and Ukraine was going to end on the 1st of January. So we prepared for it in advance. We have the whole situation that, you know, fully covered. There's no cause or concern. Nobody can see what it is that the European Union has done, which actually does prepare us with this situation. But, you know, they're telling us, they're reassuring us that, you know, they got it all well in hand.

And importantly, they've known that this was going to happen for at least a year. Now, if they've known it for at least a year that this was going to happen, then they have had input in the decision. I don't have any doubt about that at all. The European Union, the Commission, to be precise, under Osula, has been absolutely determined to end energy imports from Russia. They've been pushing this relentlessly. And even before Ursula became European Commission president, before those

start of the special military operation. The European Commission has been repeatedly pushing and lobbying to try to stop gas exports from Russia to Germany. They've been hostile to the Nord Stream pipelines. They've conducted endless investigations of gas prom. They forced gas prom at various times to renegotiate contracts. They've been demanding that Russia implement the third energy package, which would have allowed the EU to expand and actually start regulating Russia's own gas industries. Just to say, I mean, they've always hated this trade, and it looks to me as if, given that they're saying that they've known about it for a year in advance,

that they clearly had some input on this decision. It's logical because back in 2022, the Commission and Ursula set a target for ending completely Europe's reliance or dependence, as they put it, on Russian energy. So I can't imagine Zelensky making any decision of this kind, on this scale, without clear instructions from his sponsors. So the EU itself undoubtedly, I've no doubt about this, told Zelensky, we don't want this contract renewed. We don't want this transit agreement renewed. Now, there is, of course, another entity which is even more powerful than the Commission, or it has been even more powerful than the Commission. and to which, from which, the commission has repeatedly taken its orders. And that, of course, is the United States.

And the still current administration of the United States has been implacably opposed to energy connections between Russia and Europe. They have pushed hard for the United States. those energy connections to be ended. They bragged when the Nord Stream Bipelines were blown up and say that it was them, but you know, you could put the pieces together you want. Anyway, I have to say this. My own view is that this has been under discussion for a long time. The Americans, the Biden administration, the neocons, the European Commission, they've all been coming together, probably the

British, they've all been coming together and they've been saying, look, this is the last remaining thing that's happening. There's still this trade from Russia to Europe of this gas. The countries that benefit most from Hungary and Slovakia are our mortal enemies because they are the traitors within the camp. So we need to clobber them as well. So let's end this gas transit across Ukraine. And I think that decision was made at least a year ago.

And of course it's now being implemented. The Ukrainians took the first step around six months ago when they closed transit through one particular pipeline that transits across Europe. Now they're going to close the last one. And that will mean there will be no more gas moving from Russia to Europe. Or at least that was the plan. Now, of course, the doubts, the fears, the real, the dawning reality is coming in of what that actually means.

Yeah, but gas is getting to Europe via LNG, Russian gas. Absolutely, absolutely. But of course- Qatar gas, US gas, Russian gas. Yeah, absolutely. It gets there via LNG. But the fascinating thing is that amongst that LNG, the share of Russian gas has been steadily rising.

It's, Russia is, I believe, again now. the second biggest supplier of gas via mostly energy to the EU. So they're now committing themselves to ending that trade again. And I get to say something else. I think that over the last couple of days, about the last weeks, there's a dawning realisation that making these moves risks a major inflation and energy crisis in Europe. And the result is that some,

Suddenly, they came up with a plan. They said, well, let's actually try and keep this gas still flowing because we're desperately running short of gas in Europe, which they are, by the way. We already have rising gas prices in Europe. We have a difficult election coming up in Germany, all sorts of problems. So they've come up with a new idea, which was, let's cobble together an energy consort, made up of, you know, Azerbaijan and Turkey maybe and a couple of the EU countries thrown in. Let's create a consortium. The consortium will buy the gas from Russia in Russia itself.

It will transport the gas across Ukraine in the Russian pipelines. And then, of course, at the other end, well, perhaps gas can buy it back or we can buy it back and we can distribute So in other words, they suddenly realize that they need the gas after all, the pipeline gas from Russia after all, and they're trying to insert a middleman to make it possible for the gas still to flow while still ending the transit agreement with the Russians. It's absolutely crazy idea. And an absolutely furious Putin at that press conference, which we've already done. already talked about, said a categorical no.

He said, we're not doing this. There isn't the time. It doesn't make any kind of sense. You made your bed. He actually used those words, you've made your bed. Now lie on it. If you don't want our gas, you're not getting our gas. And this is the time to end this.

Those are his actual words. Yeah, these seem like really silly work around. to get the Russian pipeline gas. And at the end of the day, it still is Russian gas. Even the LNG that is going into Europe, most of it or a lot of it, is Russian. It's just more expensive Russian gas. And from what I understand, the purchasing of LNG is not as straightforward as pipeline gas where you know it's coming from Russian.

It's moving through a pipe and it's coming to the end destination. The LNG is very much dictated by futures contracts, by the market. the pricing is definitely dictated by the market. And it's just not so simple as, well, we want this ship that isn't transporting Russian LNG to come to this port. I mean, I don't know. Am I understanding it correctly? It's a little bit more complicated than, let's just say, the simplicity of a pipeline

where you know it's originating here and it's ending up there. It is much more complicated. It is much more expensive. much more expensive because if you put gas in a pipe you just you have to obviously

have the equipment but you can just send it through you're not having expensive ships with expensive you know refrigeration ports

and all about ports and storage the whole thing is much much more simple and much cheaper inherently so, much so, because in effect, the gas is traveling by itself down the pipe, whereas, as I said, if you're refrigerating it and putting it on a ship, then you have to move the ship. The ship has to move. You have to have a crew. You have all the things that go on with

that. And anybody who knows anything about the shipping industry, and once upon a time, Houston knows quite a lot. We'll know that ships don't just move around. They go to all kinds of places. load up here, they do things there, all kinds of contracts are made, so a ship might be in Russia one day, and then it might, you know, through somewhere through the Pacific, suddenly change and, you know, go to Qatar, do something there, and then of course the gas that it might have loaded up in Russia, might suddenly become Russian gas, sorry, Qatari gas, this might sound technically complicated, and in some ways it is, but it is, but it might it is not impossible. And if you get a discount on the gas in Russia, which you probably would,

and it's cheaper to buy than the Qatari gas, then as I said, you have a strong incentive in buying, sourcing your gas in Russia. Now, I'm not saying this is going on on a huge scale, but my own guess is that a lot of the gas that's pumped that's circulating in the EU system, which, you know, the liquidified, the LNG isn't actually from Qatar or the US, which they're claiming it is. It's probably from Russia. Yeah, so I wonder if a lot of this... And a lot of the governments probably are playing along with that game as well. Yeah, so wonderful.

Because they need the gas. Because they need the gas, yeah. But it's more expensive and it makes zero sense that they're doing this, except if you look at it through the lens of the ideology of the EU and the fact that that's... that they have no reverse gear, and there's no way they're going to admit that their plan to cut off Russian energy has failed, and therefore we have to get the pipeline gas. So they're never going to admit that. They're going to continue to move forward to try and sever all ties of pipeline gas from the

EU to, from Russia to the EU, so that they can come out and give statements saying we succeeded. We had this goal that in two, three years, we're going to punish Putin's war machine and we're going to cut off the transit of pipeline gas to the EU. And we succeeded. Never mind the fact that much of the gas that is in the EU system and the EU network is coming from Russia, but in the form of LNG. It's more complicated to figure these things out. It's more difficult to conceptualize it. So they're just not going to mention it or talk about it. So a lot of this may be the messaging, the EU ideology and the failure to admit to defeat to Russia,

so they're just going to move forward, even if it harms EU member states. And it is going to harm EU member states, especially Slovakia and Hungary. But that comes to my second point, which is that for the EU, there's a good thing. You know, they want to cause inflation in Slovakia and Hungary. Yeah. They want the prices to increase. They want the economy to falter because they, they want the regime change. And in Hungary, they're inching closer to getting it. They have the

person picked out. That person is gaining support. That person has the complete back end of the European Union. Peter Maggiat, as who we're talking about. And for them, any economic difficulties and trouble that they can cause for Orban or for Fitcho, for them is a net plus. Oh, absolutely. Of course it is. And by the way, I also. completely concur with your view, that the fact that they set themselves this target back in 2022, anybody who knows bureaucracy, especially in bureaucracy like the EU, I mean, achieving the target becomes an almost, it becomes in some way the most important thing, more important than whatever the effects, the longer term effects and the consequences are. But obviously,

you know, they can do as much economic damage to Hungary and Slovakia as possible and break the connection as they believe that it exists between Hungary, Slovakia and Russia, then, you know, they'll do everything they can in their power to achieve it. And as you correctly say, within Hungary itself, they have Maguire, Peter Maguire, who is the new opposition candidate, and, you know, they're trying to hope, they're hoping that in 2026 or even before they and provoke a political crisis and this terrible man, Victor Orban, will be, you know, escorted away from the scene. The problem is, it's absolutely amateur thinking, because if you create an energy shortage in one EU state, given that we have a market in energy, remember that there is a, all the EU, and by the way, Britain, are interconnected with each other.

That became very, very clear in 2022. If you have an energy crisis in one state, it inevitably affects all EU states. The country that's going to be most exposed to this in the short term is, by the way, is Italy. But they also have some issues. But, I mean, it is going to affect energy prices right across the EU. and energy prices are rising. Gas prices are currently rising because the EU's own gas reserves are falling.

They're falling much faster than they did in the previous two winters because the winter is turning out to be gold and the economic situation is somewhat different. And the imports of LNG have not been as great, So all of these problems are going to be affected, are going to, you know, made worse by this decision. You can't just do this and punish two countries and think that's not going to affect the others. Now, I'm going to just say something else, by the way, which is, of course, Europe will continue to receive some pipeline gas. That pipeline gas goes through South Stream, which is the pipeline that goes from Russia to Turkey across the Black Sea.

There have been several attempts by Ukraine, presumably, to disrupt it that we know about. But gas goes through that pipeline to Turkey. It arrives at the huge Istanbul gas hub, and it's re-exported to Europe. And it goes to various pipelines through Bulgaria and all of the others. And a lot of that gas ends up in Hungary and Slovakia. So they still have routes to get Russian gas. Of course, you can play all kinds of complex games. You could start trying to get the Romanians and the Bulgarians to stop Russian and the Austrians to stop Russian.

gas reaching those two countries. But then you start, you start entangling yourself in the interests of other powers, notably Turkey itself. Now, Erdogan, for him, the gas hub in Istanbul, is extremely important. If this starts to be disrupted, well, we know that he doesn't like Ursula very much. I mean, it could create long-term political problems. So just to say this isn't perhaps quite as straightforward as the EU leadership think it is. The net effect of all of this is that one way or the other energy costs in Europe are going to be even higher as a result of these decisions than they would otherwise have been. probably significantly higher.

And inflation is already creeping up right around the world. It's going to affect consumers in Europe, including industry consumers as well. Yeah, well, Erdogan has the ultimate Trump card against the European Union, which is refugees. Absolutely. So whenever he runs into any difficulty with Ursula, the European Union, he just had to say 3.2 million refugees. And the EU not only backs down, but they write. Erdogan, a big, big fat check as well. Yeah, Erdogan always can play that card.

But going back to the price increase, the European Union is probably not too bothered with the price increase for consumers. I really think the EU couldn't care less if everyday people pay more for energy. I really believe that they couldn't care one bit. But the businesses, what about the businesses that are going to pay more, that are going to not be competitive anymore, that are going to have to move, that are going to have to close down. We're already seeing de-industrialization in Germany. Is this something that the EU wants? Is this part of their ideology as well, maybe a part of their green ideology and that they

believe that getting rid of the business is something that they aspire to as well in the long term? So might as well rip off that band-aid as well? I think some of them do. I mean, I think that, you know, there are some people within the EU leadership who probably would like to see less heavy industry and all of that. I do think it's the ascendant view though. I mean, they've just commissioned this huge report, what this report from Mario Draghi because they're worried about the EU's loss of competitiveness and all of that. And he's come up with various proposals, none of which make any real sense and which no one seriously believe are ever going to be implemented.

But they probably at one level, most of them do worry that the EU is going to lose more industry and will become less competitive and less important around the world. But it doesn't worry them enough to make them change their stance because their stance is driven mostly by ideology. And to repeat again, they are not elected. They're not elected. They're not even accountable. They're in no conceivable sense accountable.

They're basically a bureaucracy. It's all but impossible to sack any of them. So given that their fixation is Russia, they're not going to let the fact, you know, the closure of a few facts. factories, the unemployment of a few million people. Oh, my God. That's not going to get in their way.

I mean, it's, that is the reality of the people we're dealing with. Now, can I also say something else? I mean, you know, the other country, the other place that they're not thinking about is Ukraine. Because of course, Ukraine has, Ukraine, as we know, is already in a terrible situation with energy, the Russians have been attacking the energy system. Right across Ukraine, electricity is there's not much electricity now in Ukraine. It has to make do with imports of electricity from Hungary and Slovakia, by the way, technically from the EU, but most of it comes from those two countries. Poland contributes a bit. Romania contributes some. Finland contributes some, but not

enough. So it's, it's Hungary and I believe Slovakia is the biggest supplier of surplus electricity to Ukraine. And of course, Afizu is saying, if the transit agreement doesn't, isn't continued, then we're going to stop supplying electricity to Ukraine because we can't go on supplying electricity to a country that is blocking imports of our gas. It's logical. And that's You said at the start of the program that there's a row going on between Zelensky and Fetzo. Well, that is the row. And Zelensky is furious. And he's saying that Fizzo is opening up another energy front against Ukraine.

And the, again, astonishing sense of entitlement of the Ukrainian leadership, that everything must be done for them, irrespective of what they do, which might injure other people's interests. So just say, but put that all aside, electricity, great shortages of electricity, already in Ukraine. Now you're going to add a gas shortage on top of that because the way it's worked up to now is that Ukraine itself doesn't buy gas directly from Russia. So gas transit Ukraine from Russia to the EU. The EU buys gas from Russia to cover Ukraine's needs. It's the mechanism that's called reverse flow.

And the Ukrainians are allowed to siphon off or siphon off that amount of gas. from the pipelines that the EU buys for them for their own domestic needs, which are huge. The Ukrainian energy complex, the heating complex, was built around gas by the Soviet Union back in the 1980s. So it's a major gas user. Now, up to now, Ukraine has had enough gas. But of course, if the gas isn't flowing down the pipelines from Russia, then they can't siphon off what isn't there. So that is going to put them in a very, very difficult position indeed.

And it's not at all clear how Ukraine resolves that problem. I mean, there are theories that the EU could supply gas, by LNG gas, send it to Ukraine. There's been some claims that Ukraine has just received its first supply supplies of LNG gas from the United States to be specific. The problem is that's going to be very expensive and that's something that's happening at a time when there's already a gas shortage within the EU itself. So what you're asking is European consumers, European taxpayers to pay even more for their gas, says to buy expensive gas for Ukraine at a time when European gas prices are rising. It seems a strange thing to do. And I wonder anyway whether it will be enough, given that natural gas, LNG, you know, natural gas, LNG, I mean, the Ukrainian gas pipeline network wasn't designed to use LNG.

It was based around pipeline gas. Well, we'll see how it works out. There's also the other card, which is, of course, that if European gas is being sent into the system, the Russians might just attack the energy system, the gas supply system across Ukraine. Bloomberg is talking about that as a real possibility. Nobody apparently has thought about that. The Russians could say, since it's not being used to supply our gas, it's a military target. Let's attack it. In which case, the pipelines are destroyed, Ukraine is completely left out of gas. Yeah. Or the European Union can admit defeat.

They've been defeated by Russia. Ukraine can capitulate. They can save hundreds of thousands of lives. and they can go back to the simple way of how energy was delivered in gas. I mean, you don't want to do that though. They'll never do that. They'll never do that. They'll never do that. It's better to go the other route, right, to just make things more and more difficult for everybody, yeah, to the point of collapse.

Better. Yeah, absolutely. It is absolutely consistent with the nihilism. that the EU leadership has shown right from the first day of the crisis. If ever before, they have repeatedly shown that absolute control within Europe is their overall priority. Their response to every problem is to give themselves more power, even though they invariably end up misusing it.

And the immediate effect, or the long-term effect, on people within Europe, doesn't seem to really concern them. If the EU had been concerned about preserving peace in Europe, containing the living standards or improving the living standards of the European people, it would have gone about things in a completely different. way, not just over the last three years, but over the last 30. Yeah. Anyway, just to end the video, yeah, when the prices do go up by a lot in 2025, most likely go up in 2025, the media will just blame Putin. Of course, absolutely. That's exactly what they'll be there.

Putin cut off the gas. Cut off the gas. I mean, Schultz is doing this already in Germany, and there's no pushback against it, which is incredible. But there isn't. I mean, they'll never say that it was a lot. who chose not to renew the transit agreement, or that the EU told him not to, or that they talked about this with the Biden people and all the rest. Now, I'm going to just add one last

very thing. I mean, at the moment, Trump is talking about exporting LNG, American LNG to Europe and is insisting on it and is demanding the EU with tariffs if they don't. But my own understanding about gas production in the US, which is heavily based around shales, is that it's probably peaked and that it might soon start to decline. So that could create a situation where there is an increasingly tense market for gas in the United States. And that might start to happen quite quickly. Now, given that Trump's priority, are the US, he's perfectly capable of announcing a ban on exports of USLNG. Just saying, I mean, it's happened before the United States has in the past prohibited

exports of oil products, for example. What the EU does then, I have absolutely no idea. And if Trump decides it's in American national interests to keep energy costs within the United States low until maybe the US finds more oil and gas deposits on its own territory, which perhaps it will. It may take time there, but, you know, that he wants to prioritize preserving energy prices at a low level in the United States. and that, you know, a ban on LNG exports is the way to do it.

I don't have any doubt that he will do it. Nobody, I'm sure, in the EU is considering that possibility. I can tell you for an absolute fact that they're not. All right. Just blame it on Trump. Oh, yeah. I think they already have been replaced. Blame it up who did or blame it on Trump.

Absolutely. Or both of them at the same time. Even better. Even better. Yeah. Even better for Ursula. All right. We will add the video there.

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