The United States and Germany have reached an agreement on the contentious Nord Stream 2 Pipeline. According to the U.S. State Department, they are clearing the way to complete the Russian gas pipeline and handing Germany a decisive victory.
The State Department press release, titled Joint Statement. The United States and Germany on Support for Ukraine, European Energy Security, and our Climate Goals began with Germany and the United States’ unwavering support for Ukraine’s sovereignty, territorial integrity, independence, and chosen European path. The note also mentioned Russian aggression and malign activities in Ukraine and elsewhere.
Nonetheless, the U.S. reached an agreement that will allow Germany to receive direct natural gas shipments from Russia via the Nord Stream 2 pipeline twice the current volume. In the end, it appears that Germany and Russia got what they desired.
On the other hand, Ukraine will leave the loop regarding the additional natural gas shipments to Germany via Nord Stream 2.
Germany has agreed to assist Ukraine in negotiating an extension to its current transit agreement with Russia as part of the agreement. That has currently set to expire in 2024. Germany will also contribute $175 million to a green fund for Ukraine to support renewable energy projects. Moreover, it will donate another $70 million to help Ukraine with energy security. The agreement widely anticipates though the specifics did not know until this afternoon.
Germany desperately needs more natural gas from Russia. It needs to phase out coal-fired and nuclear power plants as it moves toward net-zero emissions. As a result, it has fought hard for Nord Stream 2 to complete.
To strengthen ties with Germany, the United States has ended its fight against the pipeline in support of Germany.
U.S. and Germany to Help
According to the Undersecretary of State Victoria Nuland, we’ll see a significant effort by both the U.S. and Germany. They will help diversify Ukraine’s energy supply.
According to Nuland, Germany would favour extending the Russia-Ukraine gas transit agreement, which will expire in 2024.
Crude oil prices have expected to remain bearish for the foreseeable future, as OPEC+ countries agreed to increase supply by 20 lakh barrels per day. The third wave of COVID-19 hopes to put a further damper on the crude oil price rally in global commodity markets.
Advising commodity futures traders on all on rising’ strategy “Overall outlook for crude oil is bearish”, said Anuj Gupta, Vice President at IIFL Securities. Any rise in the future oil price should see as an opportunity to sell.
The overall outlook for the crude oil price, according to MCX futures experts, is bearish. Moreover, commodity traders advise maintaining all sell on rising’ strategies until the next trigger.