Russian news: Europe's Next Energy Crisis Is Now Assured - Russia Insider

Russia inked a second blockbuster deal with China that will starve Europe for natural gas in just a few short years. It's now increasingly clear that 2018 will mark the beginning of the end for any hopes Europe had of returning to robust economic growth.

It was by far the biggest news of the day. While it did make headlines, you might have missed it because not much was made of the affair beyond the announcement. The story came and went as if Russia has oodles of natural gas (NG) to send to China.

It doesn't. And the supplies it has now contracted to send to China will be pulled from supplies that currently go to Europe.

For the people who understand global energy markets -- that energy is the one non-negotiable substance required for economic stability and growth -- this announcement was a huge deal.

Here's what was announced:

Moscow and Beijing signed an agreement to supply gas from western Siberia to China, in a deal that could eventually see more of Russia’s gas flowing to its vast eastern neighbour than to its traditional European markets.

Assuming crucial details such as price are agreed, the deal would mark another big step in President Vladimir Putin’s efforts to build a closer energy relationship with China to offset increasing isolation from the west.

It would see Gazprom, the Kremlin-controlled energy group, supply China’s state oil company CNPC with 30bn cubic metres of gas per year. That would be on top of the 38bcm/y Russia agreed to sell China in a $400bn agreement signed in May.

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