Gas power games

As Europe eyes an end to Russian gas imports by 2027, fresh geopolitical tensions are reshaping energy markets once again. Could Trump’s mediation efforts result in a ceasefire in the Ukraine and could Russian gas re-enter Europe—directly or via shadow routes?

In this week’s episode, Richard speaks to two policy experts about what peace versus a ceasefire could really mean for gas prices, energy security, and the green transition. How do emerging interdependencies with the US, Qatar, and Africa shift Europe’s leverage—and what happens when offshore wind, solar, and LNG become pawns in great power rivalries?

Presenter: Richard Sverrisson – Editor-in-Chief, Montel News
Contributor: Andrés Cala – LNG Correspondent, Montel News

Guests: Francesco Sassi – Postdoctoral Fellow, University of Oslo
Tobias Federico – Chief Product Officer, Montel

Editor: Bled Maliqi
Producer: Sarah Knowles

Transcript

Richard Sverrisson – Editor-in-Chief, Montel News: 0:05

Hello listeners and welcome to Plugged In - the energy news podcast from Montel, where we bring you the latest news issues and developments happening in the energy sector. We long overdue a proper look at geopolitics and the engine markets, and there's been so much going on. So this week two of the biggest issues we are looking at are, firstly, why are many talking up a potential return of Russian gas to Europe? Whatever the outcome of the war in Ukraine is a return of Russian gas feasible or even desirable. Where else can companies source gas? Norway is pumping at full capacity and Qatar has just announced a delay to its Northfield East production site. And what about the green transition? Is it losing its way? The US has stopped and now restarted Equinor empire Wind Project. Landmark Offshore Wind Farms in the North Sea have been pulled. Grids across the globe are coming under scrutiny, over concerns, over their resilience, and questions have been raised over the vulnerability of large solar parks to cyber attacks. I'm pleased to be joined by our LNG correspondent and Andrés Cala who can tell us more about the current state of the globe gas markets. Andrés, what are the main geopolitical events that have influenced gas markets in 2025 so far?

Andrés Cala – LNG Correspondent, Montel News: 1:20

Well, hi there, Richard. I'm happy to be with you. Well, that your question that depends entirely on how you approach that. And fundamentally, there has been little impact on global gas markets other than some root optimization which is normal. The global balance is in fact has improved this year as expected supply is improving, especially from North America. In essence, increased EU demand to refuel storage following the normal winter. Has been offset by lower Chinese demand globally. So in essence, Europe, it's getting its fill and so is Asia. And the rest of the world is fine. But if we talk about the impact on gas prices, geopolitics has been the main driver, especially as volatility has attracted a whole bunch of new players into the market. Trump's efforts to mediate peace between Ukraine and Russia have driven TTF this year amid a myriad of factors, of course. But if peace is coming, Russian piped and LG supplies to Europe could theoretically, eventually increase, which is barrage, or the opposite could happen, and that's bullish. As for us, tariffs against China, that is mostly just out to route. China's demand is too low anyway, so reselling it to the US or reselling it. The u the us supplies or even Russia supplies to Europe just makes sense. Longer term, there could be an impact in terms of US projects being delayed without Chinese cash to underpin them. If indeed China has less trust. After all, most global LNG demand growth is still expected to come from China. They still have cotton in Australia, source sourcer needs. So it's a question of whether Europe could fill that gap, but that's still being discussed. But really despite the noise Richard, and the volatility that geopolitics triggers in gas market, I'd say global gas market trends haven't been significantly altered this year by geopolitics.

Richard Sverrisson – Editor-in-Chief, Montel News: 3:11

That's a very interesting perspective. I think, If we look at the European Commission it's gonna publish its roadmap to, to wean off Russian gas by 2027. Is that gonna increase the reliance of Europe on US LNG? Will, could gas be used as a political porn here? A bit swapping one, dependency on one authoritarian figure should we say for another

Andrés Cala – LNG Correspondent, Montel News: 3:33

look, it's in Europe's interest to buy US LNG, not to piece Trump, but because it's flexible, it's that simple. It allows Europe to improve energy security while non necessarily overcommitting to fossil fuels. And it's between companies. Trump talks a lot, but ultimately on the table you have companies. So yes, it would make sense that the share of US LNG and Europe's energy supply is bound to increase. We already signed the contracts for that, and in the spot markets, US deliveries will always have proximity as an advantage. So that makes sense as well. But European demand for LNG through 2030 will remain robust around last year's level. But it will not increase too much. And some of that demand will also be met by Kata, no doubt. And from global spot players, probably Chinese companies that are long on contracted supply or portfolio players, many of which are European companies anyway, and a lot of that will be sourced in the US as well. So yes, European dependence on US gas is likely to increase, and global gas will likely mostly track TTF, at least this decade.

Richard Sverrisson – Editor-in-Chief, Montel News: 4:36

Andrés, thank you for those fascinating insights and all the best.

Andrés Cala – LNG Correspondent, Montel News: 4:41

Thank you, Richard. Glad to talk.

Richard Sverrisson – Editor-in-Chief, Montel News: 4:43

How do renewable energy projects and other commodities play into global political tensions? To discuss this further, I'm pleased to be joined by Francesco Sassi, postdoctoral fellow at the University of Oslo and our Chief Product Officer, Tobias Federico, a warm welcome to both. I'd like to first start with the war in the Ukraine. And there's been a lot of talk about a ceasefire. What is the likely impact on energy markets if there was one? Francesco and is, could it be a game changer?

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 5:16

Ceasefire, peace. These are all terms that have been felt by. Market operators as changing the tide of the overall energy security in Europe. I think these two terms are very opposite in the sense that the concrete implications for the energy markets are quite different. If we are talking about peace or if. Talking about ceasefire, which could end just abruptly after weeks because the security agreements between Ukraine, Russia, between Russia and New European Union, between the Russian Federation and the United States are not there at. At that point, if a ceasefire would collapse instead of a peace agreement, which is built on long-term security rules, establish it between the two main opposers, in this case between Ukraine and Russia. But we know that Ukraine, without the support of the United States, is now risking to lose the war. I think. The market is still cut in the storm and unable to understand the very deep differences between these two terms. And I'm not quite sure that even in the European Union there is a lot of understanding of how this could actually impacts energy markets because if there is a ceasefire and not a long term peace agreement and we end up having another. Energy crisis after six months from the ceasefire, would that be a devastating result of political but also energy agreements between the parties? And I think that energy is the one of the primary variable here, which could help in building a long term peace agreement. But if that for that you need also to. Open to the possibility that the agreement reopens, at least in part, the possibility of Russian and European energy interdependence to exist for a long term. This is peace, right? But you have at the same time, European Union policymaker stating that by 2027, we don't want any energy affair with Russia. So is this stopping, limiting the possibility of a peace and stand facilitating a ceasefire?

Richard Sverrisson – Editor-in-Chief, Montel News: 7:55

What? What's your view, Tobias?

Tobias Federico – Chief Product Officer, Montel: 7:57

Of course, these are two really different things. A piece only can start if there before that was a ceasefire. A ceasefire will create fantasy in the markets. Now things are going to happen. We are going to reopen Nord Stream, or maybe not. So the, there are a lot of fantasies going on. A peace is always a political solution, and this political solution comes to certain conditions and it strongly depends on those conditions. What then does it mean for the energy sector and the energy market? So therefore, I think we, we really have to wait right now, honestly it's a bit, it's a talk between Russia and the us. Nobody's really involved, nor Ukraine, nor the European Union, and it's affecting both countries. So what value has. Even if they two decides if those really involved parties, which of course is Ukraine, and secondly it's us in Europe. If we don't agree with that, what shall we do? I mean, and any attempt of a cheese fry, what we've seen in the recent month and weeks really failed. So I think really that it's more fantasy than reality right now.

Richard Sverrisson – Editor-in-Chief, Montel News: 9:06

And. What are the implications there for, you know, Russian gas into Europe? There's been a lot of talk about a potential return, but also at the other side like Francesco said, that EU policy makers are very clear. They want to rid. Rid the continent of Russian gas by 2027. So where are the political lines here? What are, where are the divisions?

Tobias Federico – Chief Product Officer, Montel: 9:25

Well, I would say at the molecules, honestly, but first of all, the political divisions is clear that we don't make any direct contracts with Russian. With Russia itself, with gas prom and the gas delivery, that doesn't mean there isn't any indirect supply. I mean, if we make a supply of Azerbaijan, we take Azerbaijan Gas, for example, and Azerbaijan buys the gas from Russia. Is it Russian gas? Is it Azerbaijani gas? Is it a physical swap? Is it a financial swap? And there are so many political ways to get around that. We are currently talking about the shadow fleets. There is, I think a global trade on the vessels. Side. On the partner side, it's a bit more clearer because there's a one-to-one connection. So you have an entry point, you have an exit point, but once crosses other countries, you are also producing natural gas. So then in the upstream sector, then it becomes a bit more complicated. So I think it, it will be a clear political statement. We don't buy anything from Russia directly, but indirectly. It'll continue. There will continue. There are always ways.

Richard Sverrisson – Editor-in-Chief, Montel News: 10:29

Yeah. Francesco, obviously the political lines, I dunno if you agree, are between, clearly Slovakian and Hungary want Russian gas. How is this going to play out? Because their argument is, I. Russian gas is affordable. It's, it almost would be suicide for a European industry not to have Russian gas. What are your views here?

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 10:48

Well, this is just the political angle, but if you look at how the Slovakia and Hungary markets are interdependent with other neighboring markets, you may be still, you still could expand the number and the variety of people. Of stakeholders interested in still getting access to Russian gas with a direct access or an indirect access through these two countries. And you also have Russian gas, which is still entering on other countries in Europe, in southeastern Europe, like Bulgaria, as an example. And we are not very used to talk about Bulgaria as a natural gas. Importer from Russia because the official interdependency between two country has been somehow phased out already in 2022. But actually in the process you have Russian gas still transiting and arriving in Bulgaria, and you have also the possibility of buying Russian gas from Turkey. Which at the same time wants to become a natural gas hub for Europe in southeastern at the border with southeastern eu. Not linked, not obligated to withstand every respect EU regulations in term of energy markets. And so you have different, again, actors with different perspectives of how using. Energy crisis or a political realignment within Europe to gain more from trading natural gas, which right now means also political. A political resource has a political value which is directly attached to it to,

Richard Sverrisson – Editor-in-Chief, Montel News: 12:37

so how would you summarize in that one sentence, San Francesco that,

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 12:41

I think that we won't get easily towards a peace in Ukraine because so many players could gain from a ceasefire instead of a peace. And the ceasefire has to be, as said before, instill instability. And within this instability, many stakeholders, energy stakeholders could gain from that.

Richard Sverrisson – Editor-in-Chief, Montel News: 13:04

So the only thing we can say for sure is more unpredictable unpredictability and more volatility in the markets in terms of the gas supply and prices.

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 13:11

Yeah. When politics become, in geopolitics, become the primary variable in determining and trade that really changes everything. The equation between who is operating upstream and downstream. The equation is very different compared to a market that is there completely readable, right? The rules are there and players commit to them. It's not the case anymore.

Richard Sverrisson – Editor-in-Chief, Montel News: 13:38

So Tobias, so let's say we want, we need to replace the Russian gas. Where does that replacement come from? We've just seen Qatar, there's a postponement of one of its very large gas fields. Norway is pumping at full capacity. Where can it come from?

Tobias Federico – Chief Product Officer, Montel: 13:52

As you said, we have two possibilities. Either it's pipeline gas or it's L-N-G. L-N-G Qatar was our biggest supplier, and us is really coming there and we will have. Much more connection capacities with the vessels from the US coming up in the next years. So I don't wanna say there's an oversupply of natural gas, but I think we have certain abundances where we know that we have really enough. The problem is there that, we might switch one major supplier with another one. In Europe, we switch from Putin then to Trump and the US administration. And often it is quite funny because if I talk to friends sometimes I'm making the mistakes I say. Putin instead of Trump, even though I'm speaking about US gas. So that's the thing. The big dangers enough with the current administration that we will have enough gas coming from the US but it can be used as a political power and most likely will be used. How Looking into Trump, how erratic he is acting right now. For sure. Something will happen there.

Richard Sverrisson – Editor-in-Chief, Montel News: 14:56

What's your view, Francesco, in terms of the re reliability? The conditions may be attached to more American LNG into Europe.

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 15:05

Well, there's not just politics, not just the Trump administration, which is supposed to end in four years. We dunno if that's maybe just, am I a copi? Am I conspiracy guy or am I talking about real politics? About Trump and his mandates according to the US Constitution. I mean, there are so many variables we are not talking and the new interdependencies that the U is creating with other countries, not just the us. There is Qatar again. There are many western African countries willing to commit their LNG to Europe. There is a big country in Latin America willing to export its shale gas Argentina to Europe. Is developing a great gas plan to export this LNG to one market mainly, which is Europe. Again, we are creating new interdependencies, and within interdependencies you have energy becoming a political tool, and an object, a target of politics. This duality of natural gas. And right, which is now, right now the most important energy commodity in the world because the energy crisis was originated in natural gas and specifically in the European natural gas market. Has added so much political value to the possibility of trading, sporting, importing, producing natural gas. That is right now at the very top list of the decision, the strategies that policy makers all around the world have. In terms of also political platforms, there are policymakers stating that we are willing to create an energy superpower. Of this country that we will govern rule with the next elections. And you have, you are able to see this all around the world. It's not just an a European issue. So Europe must wake up and understand how these new interdependencies could create political leverage. And this is a very concerning issue.

Richard Sverrisson – Editor-in-Chief, Montel News: 17:14

Absolutely. I think. There is much discussion about gas as a bridging tool, and I think gas will be here for a very long time to come despite the energy transition and the rapid development and deployment of renewables. I'd like to turn to a different topic, if I may, gentlemen and look at sort of other geopolitical hotspots and other, headwinds if you like, in the global energy transition. And for example, we had the US decision or Trump. The Trump administration's decision to halt the Equinor Empire One Wind Project. And now it, they've allowed the project to restart. What? What's going on here? What do you read into this, Francesco?

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 17:53

I read a lot of instability, but say me from politics instead of just the market. You have fragmented supply chains, you have inflation already becoming a problem for all. Offshore wind stakeholders all around the world. And then you have politics. You have Donald Trump having a problem, an issue, a personal issue with offshore wind industry and the wind industry, I would say in general, and renewables, but not all of them. So how policy makers are reading energy through their lenses is much more important than understanding short-term markets trends. And this is something that the market and all the energy stakeholders have to meet. This is a challenge. They have to meet, they have to face, and this is not going away. So also green in the green industry has to keep up with these challenges and maybe also change the paradigm that for much a very long time was there that renewables are an energy source of peace. How is that possible if trade tensions, tariffs a commercial, but also a geopolitical tensions? Are there between the great powers how renewables could be the source, the peaceful source of energy for everybody? I'm not sure that is reliable and is factual anymore.

Richard Sverrisson – Editor-in-Chief, Montel News: 19:23

Tobias. What's your reaction to that? I mean, we do we see the idea is that renewables, are securing supply.'cause we're not, we're not. Dependent on a foreign supplier. But if what Francesco's saying, it's still very much a political tool.

Tobias Federico – Chief Product Officer, Montel: 19:38

What I've learned in all the 25 years in the energy market, that energy is always a political tool regardless if you are in renewable, on the gas sector, in nuclear. If you are on the demand side, on the supply side, it doesn't really matter. Looking into fluctuating renewables, yes, of course we have reduced the dependencies on importing fuels if you don't have it locally, but comes with a downside. And one downside, of course is the fluctuating part which is one. The other thing is it's still in financial investment into a long-term production. Out of that asset and the political risks. It could also be that you'll lose your concession from one day to another in the us. So you invested billions of Euro in an offshore wind park and suddenly from one day to another because somebody decides that you will lose the concession. And I think this was one of the biggest advantages we had back in the days in Germany and still today, that is not only a very high feet in tariff for solar, for example, but also the guarantee that you have political stability. So the feet in tariff, you got. 25 years ago, 20 years ago, 15 years ago. It's still valid today because it was valid for 20 years and nobody can really touch that. And that gives you, as an investor stability, financial stability, political stability. If you don't have that. It could also well be that now we have the green light to invest into a offshore wind park, but maybe for the board of the investors, it's too risky that they, in the end don't do it. It's not a decision yet, but could very well be that if you make billions of euros of investments, we've seen, there's a lot of energy investments recently, you might lose everything. So it's very likely that they're going to build it, but still you can lose the concession. Nevertheless, looking for energy independency. Yeah. That is one of the biggest goal every politician should have. So having their home supply. And we saw, and that's quite interesting to observe, that the US has changed their whole energy policy since the moment they become a net energy exporter in 2016, 2017. Because now they're looking to their energy target countries, which are consuming energy, not their energy suppliers.

Richard Sverrisson – Editor-in-Chief, Montel News: 21:50

It's quite interesting. It's a fascinating turnaround now seeing the US as a source of political instability for these kind of investors, and that's quite a change. But I think, as you mentioned, these are billion dollar investments, five to 10 billion for these kind of farms. And they can be flipped on a whim by the administration. It beggars belief really.

Tobias Federico – Chief Product Officer, Montel: 22:09

Absolutely. Absolutely. And it's super dangerous for investors because what they would like to have is stability, as Francesco has said already, the inabilities is there, labor costs, construction costs, supply chain, until that is there and up and running. But usually then it was over because then you knew it was producing at the only risk the edge of your risk. But one of the risk was, is there win? Yes or no? But right now it's coming even more risks into the whole game. So

Richard Sverrisson – Editor-in-Chief, Montel News: 22:38

absolute. I think. Francesco, I also like to ask you about. The us and there's an escalation. There, there's a kind of a cessation of kind of tensions between the US and China at the moment. How long that will last. We dunno if we will back to these full tariffs, but. I know that you have mapped some of the solar parks in the US that are they vulnerable to some kind of, cyber attack and this kind of new geopolitical reality that we have now?

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 23:06

Yeah. Again we were talking about these geopolitical fantasies in Europe and gaining access again to Russian gas through nor stream. But right now, these fantasies are everywhere. And we have this news. Some a week ago, I think officials from the State Department, if I am correct, were speaking anonymously with Reuters reporting, some inverters installed within solar panels coming from China, imported in the US and nobody knew what these inverters were there for. What is the function of these mechanisms? And yet you have one of the major agencies, news agencies in the world reporting this anonymous sources from the us, the Department of State, which is maybe we don't know that using these inverters to again, inflict some damages to the. To, to the way and approach that American, so the American solar industry and the dependency that this industry has unimportant panels from, not just from China, but from Southeast Asia, oftenly built by Chinese companies relocating there. And so again, energy independency becomes again, a tool because these panels. Have been, they have to be built in America instead of importing their them from China. And again, you have this becoming a tool for policymakers within the US but also having global repercussions. And it's quite incredible that we are not. Talking so much about how the trade and geopolitical tensions between China and the US could affect actually the European energy security. We're not talking about how this might affect the LNG trade and the way that Europe and China are somehow dependent on the same energy exporters at the same very time of the year. Natural gas is used during the winter, but still you can have trade tensions on wind turbines. They have become a political issue between Europe, the European Union, and China a year ago, and the issue is still there. It's not disappearing just because there is a bigger trade tensions between the US and China, that issue will still be there and will need to be solved at the very highest level.

Richard Sverrisson – Editor-in-Chief, Montel News: 25:36

But we've seen from the Spain blackouts the vulnerability or the dependency we have on electricity is enormous and the vulnerability of our grids and our power networks. What you're saying here about these inverters, does that also raise questions about that, that robustness of the power networks?

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 25:56

It depends on if you believe Reuters or the Department of Sayda. Is it important where the Soso news comes from or the issue that is raising? The two are important at the same time. That's the point. And policy makers with a very clear understanding not of how energy markets work, but how energy has become important for achieving political goals, could use this issue to achieve other objectives. And the blackouts in Spain became an issue, not just. Within the Spanish political scenario, it became something in the Portuguese political scenario. It became something in the French political scenario, and soon it will become also an issue in the German and Italian energy scenario, and policy makers will use this. This failure of the energy system for political purposes.

Richard Sverrisson – Editor-in-Chief, Montel News: 26:52

I think that's maybe the subject for another podcast but I think if we stick to what we're talking about here, Tobias and as Francesco highlighted this US China tension, how could that play out for us in Europe? Does that mean. For example, more LNG will come here? Or does it mean more, will solar panels and wind turbines be dumped here instead of in the us? What are, how do you see that playing out?

Tobias Federico – Chief Product Officer, Montel: 27:15

It's, I would say it's a million dollar question because it depends of course. No, but if you see, if there would've been. High tariffs on China from the US would've meant that China would have looked for alternative markets, and then it would've been Europe for general goods, for closing, for electronics, and of course also then in the energy sector for our components. We need from there now that there is a certain piece in that sense, in the tariff war they it's still the old world, so for us. I think that I mentioned on the energy sector is a bit bigger than only looking to energy. When we saw that the US now leaving Europe a bit alone on the military side, at least they said, and we have this, I always call it new world order. It only shows that they can, the US can only focus on one military theater in the future because there might be a two theater war, which could be in Russia and then against China in Europe against Russia, and then against China. And obviously they're focusing much more in the Pacific direction for us in Europe. I think the conclusion in general and as well as in the energy sectors, we should learn to work on our own, which means we should really learn to be strongly independent. But that comes. At a cost, literally, because why is all the electronics coming from China? Why is all the clothing coming? Because labor costs are quite low. They're quite efficient right now. Also, they do use a lot of robotics when they produce goods. So I think our picture of China being slightly underdeveloped is definitely gone. I mean, if you look into China, how efficient they are, how efficient they can produce stuff, how they're. Sometimes also jumping technologies. They didn't focus really on engineering car engines. They focus on EVs electric vehicles to jump that technology. So therefore, it's as, usually there's risk and opportunities. So the opportunity is that we might be able to innovate a lot on our own. The risk is of course, that we are squeezed in between two big world powers or maybe three players as Europe, as long as we are not standing really up and try to solve the problems on our own.

Richard Sverrisson – Editor-in-Chief, Montel News: 29:36

I think if we can finish on that sort of call for, or an urge for greater innovation within Europe, I think that's a way I'd like to end. Gentlemen, thank you very much for being guests on Plugged In - the energy news podcast from Montel.

Tobias Federico – Chief Product Officer, Montel: 29:48

Always a pleasure.

Francesco Sassi – Postdoctoral Fellow, University of Oslo: 29:50

Thank you. Thank you very much.

Richard Sverrisson – Editor-in-Chief, Montel News: 29:51

It's been an excellent and insightful discussion. I hope you agree, listeners, and thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, Bluesky, and other social media channels. See you next time.