Why Europe Is Furious Over Congress’s Russia Sanctions
What is the point of the U.S.’s latest sanctions on Russia? A) To contain Vladimir Putin? B) To contain Donald Trump? Or C) To lever Russian natural gas out of Europe’s energy market in order to let U.S. gas in? Congress may say A (and think B), but Europeans are steaming mad about C.
The bill enables (but doesn’t oblige) Trump to throttle Russia’s oil and gas export pipelines, the arteries that carry its economy’s lifeblood. If that happened, U.S. companies would be the biggest beneficiaries. Right now, liquefied natural gas exported from Louisiana can’t compete with Russia on price, but that could change if the sanctions threat makes it too risky to ship Russian product.
German Chancellor Angela Merkel and her government have blasted the plans, as have the European companies building the so-called Nord Stream 2 gas pipeline from Russia to Germany, under the Baltic Sea. Rem Korteweg, an analyst with think tank Clingendael, says Nord Stream should be stopped anyway, as it increases EU dependency on Russia, which already satisfies some 30% of EU gas needs. But Germany in particular seems unlikely to forgive Trump for acting in Europe’s best interests—however unintentionally.
A version of this article appears in the Sept. 1, 2017 issue of Fortune with the headline “Europe Fumes Over Russian Gas.”