What’s the Fallout from Ukraine’s Pipe Shutdown?

An employee walks at Russian gas export monopoly Gazprom's Sudzha pumping station, January 13, 2009. (Reuters)
An employee walks at Russian gas export monopoly Gazprom's Sudzha pumping station, January 13, 2009. (Reuters)
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What’s the Fallout from Ukraine’s Pipe Shutdown?

An employee walks at Russian gas export monopoly Gazprom's Sudzha pumping station, January 13, 2009. (Reuters)
An employee walks at Russian gas export monopoly Gazprom's Sudzha pumping station, January 13, 2009. (Reuters)

The shutdown of a gas pipeline in eastern Ukraine has sent a fresh wave of energy jitters through Europe.

The price of gas jumped - then fell. The cutoff is in sharp focus because it's the first time that the war has disrupted the Russian natural gas that flows through Ukraine to get to Europe, where it powers factories and generates electricity.

Here are key things to know:

What happened in Ukraine?
The operator of the gas pipeline system, Gas TSO of Ukraine, said it could no longer transport gas through a compressor station in the Luhansk region in eastern Ukraine, near the border with Russia. It said it had no operational control over the station in Russian-held territory, with occupying forces interfering in the station's operation and diverting gas in a way that endangered the stability of the pipeline system.

The company said it repeatedly told Russian state-owned gas exporter Gazprom about threats to flows from such interference but that its appeals were ignored.

The pipeline handles around a third of Russian gas heading to Europe. The Ukrainian operator said the gas flows could be made up through another pipeline that crosses from Russia into Ukraine near the town of Sudzha.

Gazprom said that was not possible, but gas flows at Sudzha rose overnight, by about 8 million cubic meters per day.

Why is this getting attention?
While Russia has halted natural gas to Poland and Bulgaria over a dispute about payments in rubles, Wednesday's cutoff is the first disruption in gas supplies flowing through Ukraine due to the war.

Any suggestion that energy supplies are vulnerable sends prices higher. Spot gas prices rose 4% at the open of trading Wednesday, to 103 euros per megawatt. They later eased, to around 95 euros per megawatt hour, below where they were Tuesday.

European governments aren't happy about sending hundreds of millions of dollars a day to Russia for energy but haven't been able to agree on a natural gas boycott because of heavy dependence of major economies like Germany and Italy. The European Union’s executive commission has proposed a phaseout of Russian oil but has run up against resistance from reliant countries like Hungary.

Economists estimate that a total cutoff of both oil and natural gas would throw Europe into a recession. A loss of gas alone would hit industries such as metals, fertilizer, glass and ceramics that have already throttled back production in some cases due to high gas prices. And consumers would face even higher electric and heating bills than they already do.

To avoid those outcomes, the EU has proposed cutting Russian gas imports by two-thirds by the end of the year through additional supplies of pipeline gas from Norway and Azerbaijan, more purchases of liquefied gas that comes by ship, faster rollout of wind and solar, and conservation. Whether that can be achieved remains to be seen.

What is going on with gas flows?
Tom Marzec-Manser, head of gas analytics at the ICIS market intelligence firm, said the Ukraine move "is not a huge cutoff to gas supplies." He described it as a loss of a few percent in overall European gas supply, when considering imports and domestic production.

"Nevertheless, it is worrying to the market that a development like this has happened," he said, noting concerns about possible energy sanctions that could interrupt deliveries and the gas cutoff to Bulgaria and Poland. "But it is not fundamentally altering the supply and demand balance in the European gas market."

Before the war, the share of Russian gas that flowed to Europe through Ukraine had fallen to around 18%. Of that, about a third goes through this particular part of the pipeline system that was shut down. That can be up to 32.6 million cubic meters a day; in recent days, it has been around 23 million cubic meters a day.

Much but not all of that gas could be rerouted through the pipeline entering Ukraine near Sudzha, said Zongqiang Luo, a gas analyst at Rystad Energy.

Even with added capacity through that town, some 10 million cubic meters per day of gas would still be in search of a pipeline route to get to Europe, and "where exactly is not clear as capacity in seemingly full," Luo said.

Over the course of a year, that daily flow would amount to around 3.6 billion cubic meters of gas, out of the roughly 150 billion cubic meters that Europe imports from Russia. It isn't a huge amount by comparison, but gas supplies are scarce, prices are high and gas importers and governments are scrambling to find all the non-Russian gas supplies they can.

What’s the impact on energy users in Europe?
Thanks to mild weather, Europe is in better shape on gas after scraping through the winter with barely adequate reserves. Reserves are filling faster than they did last year, but that needs to continue to cover demand this coming winter.

The interruption would make it harder for European countries to meet their goals for storage levels next winter and would "hasten Europe’s plans to move away from imports of Russian gas," Luo said.

"As the European gas grid is well integrated, no one country is likely to suffer any immediate impact, but this will put further strain on the system and place a floor on downside price movement,” Luo added.

Germany is receiving a quarter less gas through Ukraine, the Energy Ministry said Wednesday. Increased supplies from Norway and the Netherlands are partly compensating for the shortfall, said Annika Einhorn, a ministry spokeswoman.

She noted that the majority of Russian gas reaches Germany through the Nord Stream 1 pipeline under the Baltic Sea rather than via Ukraine.

What are possible motivations for the move?
Both Gas TSO of Ukraine and Gazprom have sought to underline their reliability as gas suppliers despite the enmity fueled by the war so analysts are still trying to figure out what the game is. Barbara Lambrecht at Commerzbank said, "It remains to be seen whether the disruption to supply turns out to be anything more than just a flexing of muscles."

Tim Ash, senior emerging markets sovereign strategist at BlueBay Asset Management, said it could be about forcing Europe's hand.

"I think frustrations are building in Ukraine that Europe is proving too slow in rolling out an energy embargo on Russia," he said. "If Europe is not prepared to shut off the energy money printing machine for Moscow, why would Ukraine not take matters into their own hands?"



Johnny Moore… What Do We Know About Chairman of Gaza Humanitarian Foundation

People carrying boxes and bags containing food and humanitarian aid packages distributed by the Gaza Humanitarian Foundation last month in Rafah, in southern Gaza. (AP)
People carrying boxes and bags containing food and humanitarian aid packages distributed by the Gaza Humanitarian Foundation last month in Rafah, in southern Gaza. (AP)
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Johnny Moore… What Do We Know About Chairman of Gaza Humanitarian Foundation

People carrying boxes and bags containing food and humanitarian aid packages distributed by the Gaza Humanitarian Foundation last month in Rafah, in southern Gaza. (AP)
People carrying boxes and bags containing food and humanitarian aid packages distributed by the Gaza Humanitarian Foundation last month in Rafah, in southern Gaza. (AP)

As the world condemned the killings this week of dozens of hungry Palestinians near US-backed aid sites in Gaza, the group responsible for distributing that aid quietly appointed a new leader: an evangelical Christian with ties to the Trump administration.

The group, the Gaza Humanitarian Foundation, which was founded last year, announced on Tuesday that Johnnie Moore, an American public relations professional, would be its new executive chairman after the previous chief quit.

Moore’s appointment comes as the foundation, which began handing out food boxes last week, temporarily halted operations on Wednesday to work on “organization and efficiency.”

It had been racked by a resignation in its ranks, chaos at its distribution sites and violence nearby, including two shooting episodes in which dozens of Palestinians were killed, according to local health workers.

Here is what to know about Moore and his ties to the Trump administration.

A presence in the Oval Office

Moore was a spokesman for Liberty University, the Christian institution founded in Lynchburg, Virginia., in 1971 by the Rev. Jerry Falwell, for a dozen years before moving into the media industry and starting his own faith-based public relations firm.

He represented early evangelical supporters of President Trump, including Jerry Falwell Jr, who succeeded his father at Liberty University, and Paula White, who now leads the White House faith office.

Moore was co-chairman of the 2016 Trump presidential campaign’s evangelical advisory board and an influential figure during Trump’s first administration. He was part of a coalition of Christian leaders who paid regular visits to the White House, attending policy briefings, as well as prayer meetings in the Oval Office.

His public relations company, Kairos, was acquired in 2022 by JDA Worldwide, and Moore now serves as president of that larger firm.

When he announced the acquisition on social media, Moore referred to his work in public relations as his “day job” as he has had many other roles and projects linked to his faith and interest in foreign policy, including writing books on the persecution of Christians in the Middle East and Africa.

In 2017, Moore told The New York Times that he and other evangelicals had pressed Trump to recognize Israeli sovereignty over Jerusalem and to move the US Embassy there. “It has been an issue of priority for a long time,” he said.

Moore describes himself as “a bridge builder and peacemaker especially known for consequential work at the intersection of faith and foreign policy, especially in the Middle East.”

The embassy move drew condemnation from Palestinian and Arab leaders, the heads of many Christian churches in Jerusalem and much of the international community, which has long viewed the status of Jerusalem as a matter to be resolved through negotiations over a future Palestinian state.

A cheerleader for Mike Huckabee

Moore, like many evangelicals, including Mike Huckabee, the US ambassador to Israel, is committed to a Jewish state based on his interpretation of the Bible.

Some evangelicals view their support for Israel as an important element of their belief in biblical prophecy. Speaking to The Washington Post in 2018, Moore said he had advised White House officials that “those who bless Israel will be blessed.”

Moore cheered Huckabee’s nomination, saying on social media in November that “selecting a lifelong non-Jewish Zionist as the US ambassador to Israel sends a powerful message to friend and foe of America.”

Huckabee, 69, and Moore, 41, have walked similar paths as public figures and Christian media creators, and they have been described as friends in Israeli news media. The embassy did not respond to a request for comment on their relationship.

The new face of a troubled Gaza organization

Israel imposed a blockade on supplies entering the Gaza Strip in March, accusing Hamas of looting humanitarian aid. That embargo was lifted to a limited degree last month, after the international community raised alarms about widespread hunger in the enclave.

Israelis conceived of the new system to establish aid distribution sites run by American security contractors in the enclave. It was meant, officials said, to circumvent Hamas, which Israel accused of stealing assistance meant for civilians.

But the rollout of the Gaza Humanitarian Foundation’s operation has been chaotic. Its previous head resigned hours before the initiative was set to begin late last month, citing a lack of autonomy.

On Tuesday, Boston Consulting Group, a US advisory firm, said that it had stepped back from its involvement with the organization, that it had placed a partner who had worked on the project on leave and that it would conduct an internal review of its work.

Humanitarian organizations have criticized the foundation’s approach to aid distribution for a lack of independence from Israel, whose soldiers are positioned near the sites and have fired what the Israeli military has called “warning” shots on multiple occasions.

And the United Nations has refused to have anything to do with the effort because it says Israel is militarizing and politicizing humanitarian assistance and putting Palestinians in danger.

As reports of disarray at aid distribution sites emerged during the project’s first week, Moore said the effort was “working” and should be “celebrated.”

When the Gazan health authorities reported shooting deaths near one of the foundation’s sites, Moore reposted a statement from Huckabee accusing the news media and Hamas of spreading misinformation.

Moore lists 18 years of service with World Help, a Christian humanitarian organization, among his volunteer experiences, along with his new appointment at the Gaza foundation and his roles on various advisory boards, including that of the nonpartisan advocacy group Muslim Coalition for America and Haifa University in Israel.

In a statement about his appointment, Moore said he would help “ensure the humanitarian aid community and the broader international community understand what’s taking place on the ground.” The foundation declined a request for an interview.

*Ephrat Livni is a reporter for The New York Times’ DealBook newsletter, based in Washington.