Gas Pipelines & Seized Russian Assets Could Give US Leverage Over The EU

Gas Pipelines & Seized Russian Assets Could Give US Leverage Over The EU

Andrew Korybko writes on Substack

US control over the trans-Ukrainian and Nord Stream pipelines could incentivize the EU into concessions on their trade war while whatever seized Russian assets that the US obtains legal ownership of from Moscow could serve to justify ramping up pressure on the bloc in this context.

Reuters reported earlier in the month that the latest version of Trump’s resource deal with Ukraine includes an “Easter egg” giving the US’ International Development Finance Corporation control over its international gas pipeline between Russia and the EU. This prompted another report from Reuters alleging that French and German firms are open to the possibility of resuming imports via that route. These reports collectively suggest that the US wants to control Russia’s pipeline gas exports to Europe.

The triple rationale behind doing so would be to obtain further leverage over the EU amidst their trade war, buoy its struggling economy if a deal is reached so that it’s a more stable market for American exports, and incentivize Russia into agreeing to a ceasefire by restoring some of this lost revenue. In furtherance of this goal, the US might also try to obtain control over the four Nord Stream pipelines, the scenario of which was analyzed here and here.

While control over the Kiev-owned Ukrainian pipeline could be obtained via Trump’s resource deal with Ukraine, which might require forcing Zelensky to form a government of national unity if he doesn’t agree to this on his own, different means would have to be employed for the Russian-owned Nord Streams. Hypothetically returning the estimated $5 billion of seized Russian assets under American jurisdiction wouldn’t suffice for replacing the nearly $20 billion that Nord Stream 1 and 2 cost in total.

The additional $15 billion (or more if Russia demands such and the US agrees) could be obtained by pressuring the EU into releasing that amount of seized Russian assets under its jurisdiction. If the EU refuses, then Russia and the US could agree to a creative financial arrangement whereby Russia transfers legal ownership of this sum to the US, the US transfers this same amount to Russia, then Trump weaponizes the $15 billion of newly US-owned assets under EU jurisdiction as a chip in their trade war.

This formula could also be utilized by them for facilitating Russia’s reportedly requested purchase of Boeing jets that Bloomberg recently claimed that it suggested buying with some of those seized assets. Taken to its extreme, the estimated $300 billion worth of total assets that the West seized from Russia could be transferred to the US via these means for large-scale purchases across a slew of industries that would solidify the strategic economic partnership that they want to forge in the post-conflict era.

White House Press Secretary Karoline Leavitt recently said that “There is an incentive for Russia to end this war and perhaps that could be economic partnerships with the United States” so this could be the means to that end. Russia has also made do without those assets and doesn’t expect them to be returned in full, perhaps not even at all despite official rhetoric to the contrary, which is why this would be the most mutually beneficial use of them in the context of the nascent Russian–US “New Détente”.

The creative energy diplomacy and financial arrangements that were proposed in this analysis would give the US lots of leverage over the EU. They’d correspondingly result in control over most Russian pipeline gas imports for incentivizing the EU into concessions on their trade war while whatever seized Russian assets that the US obtains legal ownership of from Moscow could serve to justify ramping up pressure on the bloc in this context.

The Trump Administration should therefore seriously consider this.

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(SOURCE)

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