- Marco Rubio: U.S. at social, moral crossroads
- ‘We’re coming for you, Barack Obama’: Top U.S. official discloses threat from ISIL
- White flags baffle NYPD: ‘We’re lucky it wasn’t a bomb’
- N.Y. Gov. Cuomo’s office interfered with, pressured corruption commission: report
- Brit lawmaker: I would fire on Israel if I lived in Gaza
- VA apologizes to forgotten Marine veteran locked in Fla. clinic, forced to call 911
- U.S. social and economic trends on worrisome track, survey finds
- McDonald nomination unanimously referred to full Senate
- Chuck Norris honorary chairman of NRA voter registration campaign
- GOP outraged Obamacare investigators able to get coverage with fake IDs
Libya, Japan crises to enrich Russia
State-owned natural-gas monopoly poised for upsurge in sales
Question of the Day
MOSCOW | Only a year ago, Russia's dominance as a global energy supplier was threatened by low gas prices and a reputation as an unreliable trade partner. But with the world now shaken by Japan's natural disasters and uprisings across the Middle East, the country is back at the heart of the market — and cashing in.
Russia's state-owned monopoly Gazprom rushed to sell extra gas to European nations when their supplies from Libya ran dry during the escalating violence there. It will also gain from selling energy to Japan, where an earthquake and tsunami have shut down 12 gigawatts of nuclear capacity.
Gazprom told the Associated Press on Tuesday it is willing to ship more gas to Japan and is now in talks with several power-generating companies such as Tokyo Electric to sell them liquefied natural gas.
Japan's struggle to keep radiation from leaking at the Fukushima nuclear plant, meanwhile, has caused a deep rethinking in the role of nuclear energy, particularly in Europe.
The upshot of the recent weeks' events, analysts say, is that fossil-fuel producers stand to gain, particularly Russia.
"There's every reason to assume that these events are a game changer, both for Gazprom and Russia, because Russia is viewed as a much more reliable gas supplier, and the customers are more likely to want to lock in supplies," said Chris Weafer, chief strategist at Moscow-based brokerage UralSib.
While its reputation has in the past been tarnished by sudden gas cutoffs owing to pricing disputes with Ukraine, Gazprom — the company that handles the Russian state's gas trade — has always insisted it was reliable.
With unrest spreading across the Middle East and threatening major new sources of gas, like Algeria, that may no longer sound like an exaggeration.
Russia already provides two-fifths of Europe's gas imports, a figure that could grow. Libya, by comparison, accounted for about 2 percent before its taps were turned off because of the conflict.
In Japan, where authorities are trying to avert a nuclear meltdown and find energy supplies to feed the electricity grid, Gazprom has taken the opportunity to try to gain a foothold in a market it has long been trying to crack.
Russian Prime Minister Vladimir Putin said last week that Russia could redirect Europe-bound liquefied natural gas, which can be transported by ship, to Japan while shipping more piped gas to Europe.
Moscow-based investment bank VTB Capital has estimated that events in Japan and Libya could add an extra 3 percent to 5 percent to Gazprom's sales this year — based on the assumption that Russia will sell an extra 10 billion to 15 billion cubic meters of gas to Europe and Japan.
In March, its sales were up by 1.5 billion cubic meters, or about 10 percent, compared with a year earlier.
The resurgence in Russia's and Gazprom's fortunes has been evident in the stock market. Shares in Gazprom have risen 11 percent in the past month — compared with a mere 2 percent rise in the 30-stock MICEX index.
TWT Video Picks
The subsidies are a hit with patients who don't exist
- Obama orders Pentagon advisers to Ukraine
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- Hezbollah warring in Syria could join fight against Israel
- Hamas orders civilians to die in Israeli airstrikes
- Obama pressed on Sudanese mother's case, facing death sentence over Christian faith
- Netanyahu's Wikipedia page replaced with giant Palestinian flag
- House task force to recommend National Guard on border, faster deportations
- Democratic Sen. John Walsh plagiarized War College master's thesis: report
- EDITORIAL: Poor Hillary, rock-star wannabe
- Family removed from Southwest flight over tweet about rude agent, dad says
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq