Gazprom is indispensable if Algeria goes up

As Canada and Brazil are to the U.S. oil markets, Russia is to the energy-hungry euro zone. This gives Gazprom all the cards.

Libya was not a major piece of the European energy equation, but even now the prospect of a civil war over Tripoli has had an impact on the business of continental energy companies like Austrian refiner OMV (OMVKY, quote) and Italian oil and gas producer Eni (E, quote) .

A disruption in Algeria — which produces 17% more oil than neighboring Libya, and where the government ironically just ended a 19-year state of “national emergency” to calm the crowds — could heap additional strain on these companies’ supply lines.

Between them, Algeria and Libya account for 4% of global oil production, most of it going to Europe across the Mediterranean.

This makes Gazprom (OGZPY, quote) and its pipelines even more indispensable than ever when it comes to keeping Europe’s lights on and homes heated. Solar and wind are coming along, but in the meantime, the Russians are the obvious beneficiaries:

And do not glaze over the strategic story here. With Brent crude oil reaching toward $120, oil-rich Russia’s fiscal position is gapping up by the day.

Sooner or later, Wall Street is going to upgrade Moscow again, and when that happens, RSX (quote) is the obvious place to play.