Russia plans to cut off all energy supplies from Europe. And not only. Comment by Georgy Bovt
The economic war is becoming all-out, all consumers are consuming, the parties are exchanging small risks and constantly raising rates, the economic political scientist believes. How far will Russia’s energy conflict with the West go, given the initiative to set cap prices for Russian oil and gas?
Speaking at Eastern Economic February, Vladimir Putin answered on proposals made in the EU, prices are introduced not only for Russian oil, but also for gas. “There are contractual obligations. Will any decisions be made that meet in nature, contrary to contracts? Yes, we just won’t do it. And in general we will not generate anything if it is recognized by interests. In the case of the case – economic. We will not supply gas, nor oil, nor coal, nor fuel oil, we will not supply anything,” Putin said.
“We will not supply anything outside the scope of contracts. We will not do anything forced. And we have only one thing – how to say in an ordinary Russian fairy tale: “Cold, freeze, wolf’s tail,” Putin added. Previous Edition Politico learned about the proposal of the European Commission for a low gas price of 50 dollars per megawatt-hour, or about 500 euros per thousand cubic meters. How far will the energy war go?
Putin’s “wolf tail” joke was an obvious reference, now spreading like a virus roller about how Europe will freeze without Russian gas. Surely the president saw him, and maybe even on Friday. Although Dmitry Peskov can, of course, deny it. A sharp aggravation is currently observed on the fronts of the energy war, and the statement of the President of Russia about his readiness to completely stop all deliveries of energy resources can be taken seriously. Not sentimental. In case of occurrence, his skeptical statements in the summer about the problems with the repair and the return of the Siemens turbine from Canada “played” like clockwork.
As for the impact on this nerve impulse of the idea, the European Commission introduces a price ceiling for Russian gas, this has become yet another confirmation of how solutions are being developed and introduced today. And so, in this case, stronger feelings, emotions and improvisations often arise than are calculated, especially about serious consequences. As they say, no one wanted to leave. Most likely the idea was born partly spontaneously after the September 2 G7 countries agreed introduce a ceiling on the purchase prices of Russian oil. The limitation mechanism, as planned, is based on the fact that companies will refuse insurance and provide financial support for tankers with Russian oil if it costs more than the agreed level.
The price has not yet been determined, it is supposed to be set simultaneously with the entry into force in relation to the Russian Federation, which should come into force on December 5. A number of publications in the Western press indicated that the initiators are optimistic and hope, among other things, to draw India into this process on occasion. However, in practice it has not yet earned, at least the price matters.
In the European Commission, looking at the “Big Seven”, they thought: why are we worse? And they decided, apparently, to designate the price, taking immediately as a landmark two or three years ago. European officials are confident that underground storage facilities in different countries are 80-90% complete, and the filling process has not yet gone beyond the usual schedule. However, it should be noted that during the period of consumption, periodic consumable reserves were covered, including ongoing renewable energy sources.
The European Commission, however, is aware that in the event of the introduction of marginal gas prices in Europe, it is necessary to prepare for a completely cut off market supply, especially since they have already been reduced to a minimum. The European Commission’s preliminary document states: “The price cap should be designed so that Russia faces itself with lower gas consumption than the price cap. Assuming that in the previous decade (2010-2020) higher Russian gas prices ranged from EUR 5 to EUR 35 per megawatt-hour, any reduction in this level of risk that Russia will profit and offset its marginal production volumes.”
However, the situation has already gone so far, which purely means that the calculations here may not begin. The European Commission believes that the pipeline gas market is much less flexible. Perhaps, than the oil market, then in Russian there will simply be nowhere to go. They will not simply count the entire volume of accumulated gas in Europe, blocking the ventilation. Such a belief, however, is based on insufficient knowledge of the mentality of the exporting country. Moreover, the EU itself has long since departed from adherence to principles and economic rationality.
Energy ministers of the EU countries gather performance the possibility of setting marginal prices for Russian gas on 9 September. There is already a future among European officials. A number of countries, including Germany, doubt the inevitability of destroying the market in this way. With a high probability, it can be predicted that the decision to introduce a price cap will not be satisfied for all 27 countries – there are no other mechanism for implementing decisions in the EU yet. At the same time, the ministers can agree on the introduction of a mechanism for regulating price exchange fluctuations, perhaps also on subsidizing energy purchases in the most vulnerable countries, redistributing the same gas within the application. But all this, as they say, at their own pan-European expense. The new order, with a high probability, is a departure from the mechanical orientation to the exchange market and spot prices, which the EU itself influences a few years ago, refusing key contracts with Gazprom.
There is a theoretical solution. In particular, he was prompted by the President of Russia: weaken the membership and the Nord Stream will start working again. But for now, Europe does not want to go for it.
Moscow, for its part, is ready to aggravate the situation on another front – grain. A number of local residents living from the plenipotentiary to the UN, and ending with the president at the Eastern Economic Market, made it clear that in its current form the deal to remove the seizure from Ukrainian ports in Russia did not take place. The voiced main claim is that the grain is not going to starving countries, as expected, even quite full.
However, the recurring voiced or not voiced dissatisfaction, apparently, is that the main motive for Moscow was to move towards this parish, it was the liberation of life for Kyiv, it exported grain under previously concluded contracts received for hundreds of millions of dollars and on return flights . brought the necessary goods and equipment. the main motive was the impact on the exported grain and mineral products themselves by reducing the impact. For example, on the same ship freight. That did not happen. If they don’t weaken again, they won’t. Thus, economic warfare becomes more and more profitable. But now it’s only the first half of September. What will happen in the winter!