‘Türkiye is already an energy hub’

Karin Kneissl is a former diplomat, Middle East expert, energy analyst and writer. Kneissl, who served as Austrian Foreign Minister between 2017-2019, is a very colorful person. Russian leader Putin’s guest appearance at her wedding in 2018 caused a sensation in the West. Kneissl, who speaks many languages at an advanced level, drew attention at the 73^rd session of the United Nations General Assembly by speaking in Arabic in her opening statement and shifting to French, Spanish, then Hebrew, and finally English.

Kneissl, who also had a seat on the board of directors of Russian energy giant Rosneft until March of this year, is one of the names who knows the world energy markets well. Karin Kneissl, who has not been ‘welcomed’ in Europe because she criticized the sanctions and argued that relations between Europe and Russia should not be broken, is currently living in Lebanon. We had the opportunity to ask him questions about Europe’s energy crisis, Türkiye’s position, and OPEC countries.

‘It takes at least five years to say goodbye to Russian gas’

• Can the European Union be independent of Russian gas after the Ukrainian crisis? In other words, after the Nord Stream sabotage, have energy ties between Russia and Europe completely broken? 

We’re still in the middle of a strife. I would prefer not to describe it as ‘after the Ukrainian crisis.’ We’re in the middle of an armed conflict that we can’t foresee the outcome today. As diesel shortage has shown us, there are also problems in this regard. I mean, we’re in the midst of problems, we’re not over them. We will see to what extent this will affect transportation and electricity supply. You must wait and see how all this plays out.

To answer your question, is it possible to break away from Russia’s energy supply? Theoretically, analysts repeatedly pointed to this hot issue when the first sanctions (first on coal) were introduced at the end of February and especially in March. At that time, “oh, we cannot leave the Russian gas yet” mentality was acknowledged. Because it takes at least five years to say goodbye to Russian gas. That’s the trick.

‘German companies are transferring manufacturing to the U.S.’

• Can a creative solution be generated for European industry to compete on a global level without Russian gas in the coming years? In other words, did Europe shoot itself in the foot with these sanctions?

Absolutely. Especially in Germany and in the German-speaking geography, I would include Austria as well, of course, no energy policy has been implemented in the last 15 years. The essence of energy policy is to provide low-cost, safe, and predictable energy to households and industry. Only a small part of the climate policy was driven by energy policy, whereas the opposite should have been done, and a reasonable and reliable energy policy should have been implemented in which climate policy also played a role. The deindustrialization of Europe began in the 1980s. The textile industry has been relocated. Further ‘dirty’ sectors, such as the steel industry, were transferred to the Asian continent at a cheaper price and with less bureaucratic functioning. In fact, it was the petrochemical and automobile industry that remained in Germany. And they’re both heavily dependent on natural gas. What is currently happening is that a part of the German Volkswagen factory facilities and the German petrochemical industry have transferred manufacturing to the United States and Canada, some of which are still in the decision-making phase. Because the energy cost is lower there.

‘Planned economy of the darkest periods in action’

• What do you think about the price cap on Russian oil?

Decision-makers and those who advocate price cap implementation have no knowledge of supply and demand and of market forces. Maybe it can be explained in this way. At this point, we’re in the middle of a planned economy debate that frightens me. The basis and foundations of the idea of market economy, which we do not need to go as far as wild capitalism, are being eliminated. The main categories are supply and demand, price is the result of supply and demand. Of course, cartels, political measures, and control measures cause price deterioration repeatedly. But the planned economy of the darkest periods is being brought into play here.

‘Energy to Europe will flow from Türkiye’

• Russian President Putin has suggested Türkiye become energy hub to Europe. Is that realistic?

Türkiye is already an energy hub. We’re face to face with this age-old reality. You can’t alter the geography, it’s permanent. Although he did not pronounce the word geopolitics at the time, old Bismarck said almost 180 years ago that ‘geography is the constant of history.’ Recently, the importance of geography, especially when it comes to Türkiye, has rarely been so strongly recognized. When it comes to energy and food supply, the Bosporus is again the center of attention for the rest of the world. In fact, Türkiye has gradually become an energy hub since the late 90s. Consider the Baku-Ceyhan pipeline that opened in the early 2000s. Think of Nabucco, which remained in the project phase, for example, the natural gas in the Caspian region wanted to be delivered to Europe, and Türkiye was in a very central position. As a result of the pressure of the USA, when the European Union had to give up South Stream in 2014, Russia transformed this project into TurkStream and a pipeline was laid from Russia to Türkiye over the Black Sea.

Therefore, Türkiye is already a hub and a facilitator in Europe’s energy supply. Intensification and expansion of an existing issue decided by Russian leader Putin with President Erdogan in Sochi and then in Samarkand; systematic progress of the process until it reaches the natural gas exchange.

‘Gulf states no longer return U.S. calls’

• What’s your opinion on the debates about the decisions taken in the OPEC+ group?

OPEC+ consists of 13 OPEC and 10 non-OPEC nations for five years. They account for the vast majority of daily oil production worldwide. Compared to OPEC, which has controlled 30% of the market in the past, this group is coordinating a much larger leverage today. In accordance with the U.S. influence in the twentieth century and the first twenty years of this century, Washington always gave a ring to Riyadh or other Gulf countries. Those calls were made for Washington’s casual requests and demands. These calls keep coming in, but no one’s answering any more. This displays the ongoing geopolitical change. The U.S. has its own production of schist oil, which is virtually no longer dependent on oil imported from the region. But the question is, how did price formation occur worldwide? The high price would benefit schist oil production in North America.

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