Geopolitical tensions flare amid natural gas shortage
Citi more than doubles its fourth-quarter natural gas forecasts

Anxiety over the increasing shortage of natural gas spilled over into into the geopolitical arena on Friday, with the Yuriy Vitrenko, the CEO of leading Ukrainian energy firm Naftogaz taking aim at Gazprom.
Naftogaz criticism
Speaking to CNBC, Vitrenko argued that the Russian state-backed oil and gas giant was using to the ongoing energy crisis to increase the attractiveness of the Nord Stream 2 pipeline, which Gazprom is currently building to deliver the commodity from Russia to Europe via the Baltic Sea.
Accusing the company of deliberately holding back supplies of natural gas to Europe and blocking the exports to Ukraine that travel through Russia from Central Asia, Vitrenko said: “This is a very clear sign that they are using gas as a geopolitical weapon at the moment.”
The Nord Stream 2 pipeline will supply natural gas from Russia directly to Germany. For several years, the nations that it will bypass, Ukraine and Poland, have acted in conjunction with the US in attempts to frustrate the endeavour.
The pipeline could start delivering by the end of the year. Gazprom has yet to comment on Vitrenko’s accusations.
CFO of Russian gas producer arrested
Although efforts to frustrate Nord Stream 2 have largely been abandoned, the antagonism has continued.
On Thursday, Mark Gyetvay, chief financial officer (CFO) and deputy chairman of the board at Russia’s largest independent producer of natural gas, Novatek, was arrested in the US on tax-evasion charges.
In a statement, the US Department of Justice said it had charged Gyetvay with defrauding the US by failing to disclose “his substantial offshore assets”, which were at one point worth more than $93m, and failing to file and pay income tax.
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IEA’s statement
Earlier this week, the International Energy Agency (IEA) called on Russia to increase natural gas exports to Europe, stating: “The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season.
“This is also an opportunity for Russia to underscore its credentials as a reliable supplier to the European market.”
Citi raises forecast
The effect of the growing gas shortage has been felt most profoundly in Eastern Europe and the UK, where a succession of smaller energy suppliers have already collapsed.
However, with 90% of the global population heading into winter, disruption could prove to be much more widespread.
Seeking to avoid such an eventuality, China – already the world’s largest natural gas consumer – has stepped up imports of the commodity. The country’s total gas demand for 2021 is expected to rise 11%–13% higher year-on-year, according to China’s National Energy Administration (NEA).
On Thursday, Citigroup more than doubled its fourth-quarter natural gas forecasts for Asia and Europe, stating that the commodity could jump as high as $100 per million British thermal units (mBtu).