Bulgaria can withstand 30 days of stopping Russian gas (VIDEO)
The war in Ukraine has shaken the world economy and raised memories of crises unprecedented in decades. The prices of oil, gas, grain and metals literally skyrocketed. Many fear that even more difficult times are coming with even higher prices, high inflation and shortages of basic products.
How much depends on Europe and Bulgaria on Russia, gas supply can happen and what will happen to the Bulgarian economy in such a scenario, discussing politics and economist Georgi Kadiev.
Bulgaria could withstand about 30 days of shutting down Russian gas due to the war in Ukraine. This was stated by the politician and former BSP MP Georgi Kadiev in the show Studio Aktualno.
The storage in Chiren is currently about 20% full, ie. I have about 100 million cubic meters of gas. This is the consumption of the Bulgarian economy for 10 days, including “Sofia District Heating”. If the heating season is the last, I will have gas for 20 days. By adding Azeri gas and our small own production, we can last more than 30 days Kadiev. The Telegraph: Europe will suffer a severe blow if it refuses Russian gas
Within this one month, Bulgaria must look for alternative supplies, which, however, cannot be found so quickly. Under different conditions, there will be a force majeure situation and will make the more energy factories stop production in order to have gas for household consumers and district heating companies. At some point there may not be enough gas for the home. I hope it doesn’t get there.
According to Kadiev, neither Russia can do without Western money, nor Europe can do without Russian gas and oil. Proof of this are the half-hearted sanctions – and now you can pay for Russian gas and gasoline through the SWIFT system. West v. Russia: Gas supplies do not stop despite opposition
In the short term, Europe cannot do without Russian oil, and especially without Russian gas. It is possible to import more liquefied gas through Spain, but it is difficult to reach the whole continent and especially Eastern Europe. Russian oil could be replaced by Iranian oil, which is not the best geopolitical option. Both Europe and the world are at a dead end, the politician said.
Western sanctions will not shake Putin until an embargo is imposed on the purchase of gas and oil. This will deal a very heavy blow to Europe, and that is why it does not want to do so. Germany and Italy are strongly opposed because they are the largest carriers of gas.
The situation with gas is very difficult, as Europe has few gas storage facilities. The largest repositories are in Ukraine. European gas storage facilities are currently only 16% full, and after that time of year they were 30% full. The storage area is filling up in the summer, the question is whether it will be possible now if there is no Russian gas. This is probably the main reason why there is no embargo. Gazprom is cutting supplies to Europe’s largest storage facilities
Europe will inevitably impose sanctions on Russian oil and gas as public pressure intensifies as the number of victims of the war in Ukraine increases. The EU will have enough gas for the winter, the EC chief said
The current lighter sanctions make sense, they make everyday life in Russia much more difficult – Russians can not travel because there are no flights, can not buy some goods and services, can not use Facebook, Twitter, Spotify – services of which we are all used to. But this is not something that will bring down a country, it will simply worsen the quality of life.
Russia has money – every $ 10 a barrel increase in oil costs about $ 20 billion. euros per year. If there is no embargo on oil and gas purchases, the Kremlin could continue the war and fund it, despite much of the central bank’s reserves being blocked.
The war is expected to last a long time for the market to react – in just one day the price of gas with a supply contract in April jumped by 66% and electricity rose by 60%. CNBC: The Russian-Ukrainian conflict will lead to higher gas prices in Europe
Only of the greatest dangers in Europe and the United States, they will be withdrawn from the Russian market, they will be replaced by China. When Russia breaks away from the SWIFT system, it will turn to other systems available to China. Friendship between Russia and China is inevitable – Moscow is pushed into a corner and has no choice.
If you want to leave Russia by plane, there are flights only to Istanbul, Qatar and the Armenian capital Yerevan, from where you can go elsewhere. The question is that within 3 weeks Russia will not have spare parts for aircraft, even for domestic flights. China or another country will inevitably settle because the market does not tolerate empty spaces.
What can Bulgaria do in an emergency situation?
In all the more complex decisions of the Bulgarian government they are very important and can have severe effects for years to come.
Bulgarian power must limit the amount of energy to neighboring countries. Restrictions will be more complicated than Romania and Greece, as they are part of the EU’s common market. But we can easily limit the amount to Serbia and Northern Macedonia. We export 700 megawatts per hour to them, which is 40% of the total amount.
The price of electricity on the energy exchange in Germany for a week averages 600 euros or about 120 euros per megawatt-hour. The Bulgarian economy cannot present such a price, no matter what help the government gives. The state does not cover the full difference in price, you must first pay your bill, which comes 2-3 weeks later. Companies need to sustain themselves financially during this time, and not every business can do that.
The state must seek not only to compensate for high electricity prices, but to push them down, and one solution could be to limit the amount to Serbia and northern Macedonia. Inclusion of additional capacities for electricity production – at the moment the dams of NEK are almost not working, it is possible to work for the state TPP “Maritsa Iztok 2” at full capacity.
We need more electricity production, Bulgaria has the resources for that, because it earns a lot of money from high electricity prices. Inflation this year will be much higher than expected – probably over 10%.
There is no economic logic in the rise in the price of oil, gas and other basic raw materials. It’s all politics and it’s about news and political statements about the war in Ukraine.
What are the scenarios for the development of the war?
The best-case scenario is for Russia to withdraw from Ukraine tomorrow and declare that it is ending the war and will rely only on diplomatic negotiations and sanctions. This, in my opinion, is unrealistic.
The worst case scenario is nuclear war. German Foreign Minister Analena Burbock said today that Germany’s top priority is to avoid World War III. Only then comes the fate of the lower union, Ukraine, supply gas, etc. In just 10 days since the start of the war, we have come to the question of whether there will be a third world war. There are people who think there will be such a war. In no case is excluded.
Unfortunately, the realistic scenario is also not good – a great and protracted war in Ukraine. Russia will probably succeed in the war, but it will lose the peace. It will be something similar to the situation in Afghanistan or Iraq – it will last for many years. Russia will have to invest an awful lot of money in the Ukrainian economy, because no one else will want to do it. At some point, maybe in 10 years, there will be some solution to the Ukrainian issue, it is possible that Ukraine will be divided into several parts.
At least for now, I don’t see a realistic opportunity for Russia to reverse. Putin lost in this war as a risk to Russia’s existence and will not allow you.