Pay in rubles or have your gas shut off by April

[TimeTeller]

Russia walked this backed: https://www.reuters.com/business/energy/russia-will-not-demand-immediate-switch-gas-payments-roubles-kremlin-2022-03-30/

Their messaging is confusing and their economy is too fragile to further restrict themselves from global commerce, so you can expect something like this to not go through. It sounded like an empty threat from the start and a mere desperate attempt to avoid sanctions. Appears Russia still has India and China open to them for unrestricted trading, but they cannot reasonable expect to cut off trading from the rest of Europe and keep their economy afloat.

Yeah, I don't expect them to just shut it off. This is more posturing but they might eventually go on with it in the future. After all this means they'd be getting Euros in exchange.

The action of shutting off would really be not immediate as there are some existing contracts that need to be filled.
Maybe, after those contracts expired, European countries will assess the situation and push thru the shutting down of Russian services.
But if they can't find immediate alternatives or replacement, they may possibly continue to pay Russia, but now in rubles.
They will definitely weight the situation, but they won't be shutting down Russian gas if they can't find alternatives.

[Sithara007]

The action of shutting off would really be not immediate as there are some existing contracts that need to be filled.
Maybe, after those contracts expired, European countries will assess the situation and push thru the shutting down of Russian services.
But if they can't find immediate alternatives or replacement, they may possibly continue to pay Russia, but now in rubles.
They will definitely weight the situation, but they won't be shutting down Russian gas if they can't find alternatives.

In countries such as Germany, industries are being shut down due to unavailability of gas. And even at this point, pipeline gas (as per contractual terms) from Russia is manytimes cheaper when compared to imported LNG from Qatar or the United States. The funny thing about pipeline gas is that the prices are linked to crude oil prices (although with a lag), and right now Russia doesn't make much of a profit from selling it. If the Europeans want to replace this gas with some other source, they may end up paying 3x or 4x extra.

[tygeade]

Russia's military aggression against Ukraine has not yet subsided. In Russia, they realized that they could not effectively attack Ukraine from three sides, as they had previously counted on the minimum resistance of the Ukrainian armed forces. The Armed Forces of Ukraine, having already 8 years of experience in military operations, very competently took advantage of the situation and do not arrange frontal battles, but operate in small groups with the support of artillery and aviation, inflicting pinpoint and tangible losses on the enemy. Therefore, in the first month of the war, Russia lost more than 40,000 people killed, wounded and captured. Military equipment "the second army of the world" has already lost about 40 percent, eight of the ten invading armies of Russia.

They can try any tactics they want to try, it will not succeed for one simple reason. Russia is fighting with soldiers, and that makes sense, people who have military experience and guns and armour and weapons and tanks etc etc, that is how you go to a war. However, Ukraine has the advantage of the fact that they are fighting as a whole nation. Sure there are some people who are fleeing the nation and going to other nations.

But, every single person who stayed back, will be fighting Russia. So, it is not about Russia military versus Ukrainian military, it is more like Russian soldiers vs EVERYONE in Ukraine right now. This is why they are failing, and will keep on failing.

[stompix]

In some countries, the weather is such that it is covered with snow all year round. If the gas supply in these countries is cut off, an unimaginable bad situation will arise. Countless people will die because of the weather in these countries.

In some countries, why don't you name a few?
It's quite funny when I hear people talking about Europe and thinking that in northern Europe it's snow all year long, we all ride sleds and it's like Frozen every single day. Might surprise you but there is no such thing anywhere, this is Oslo in summer:


Europe gets way less snow than the US, it gets in a lot of parts less snow than Jpana and in some parts, it barely snows as in much of France, UK and Spain.
So really, stop with these silly things.

In countries such as Germany, industries are being shut down due to unavailability of gas. And even at this point, pipeline gas (as per contractual terms) from Russia is manytimes cheaper when compared to imported LNG from Qatar or the United States.

And of course, you have no real proof of the "many times cheaper" thing as you claim.
Let's debunk this myth of LNG being x times more expensive, directly from the source:
https://www.aa.com.tr/en/energy/energy-diplomacy/us-lng-price-up-to-40-higher-than-russian-gas-novak/20225

The price of liquefied natural gas (LNG) from the U.S. is at least 30-40 percent higher than Russian pipeline gas, Russia's Energy Minister Alexander Novak said on Saturday.According to Russian news agency Tass, Novak said that the U.S. wants Europe to buy its LNG but the price of which is at least 30-40 percent higher than Russia's piped gas.

So before all these events even Russia barely manages to claim its gas is 40% cheaper than LNG.

[Smartprofit]

Russia walked this backed: https://www.reuters.com/business/energy/russia-will-not-demand-immediate-switch-gas-payments-roubles-kremlin-2022-03-30/

Their messaging is confusing and their economy is too fragile to further restrict themselves from global commerce, so you can expect something like this to not go through. It sounded like an empty threat from the start and a mere desperate attempt to avoid sanctions. Appears Russia still has India and China open to them for unrestricted trading, but they cannot reasonable expect to cut off trading from the rest of Europe and keep their economy afloat.

Yeah, I don't expect them to just shut it off. This is more posturing but they might eventually go on with it in the future. After all this means they'd be getting Euros in exchange.

The action of shutting off would really be not immediate as there are some existing contracts that need to be filled.
Maybe, after those contracts expired, European countries will assess the situation and push thru the shutting down of Russian services.
But if they can't find immediate alternatives or replacement, they may possibly continue to pay Russia, but now in rubles.
They will definitely weight the situation, but they won't be shutting down Russian gas if they can't find alternatives.

Turning off the gas is a serious technical problem. 

The equipment can function effectively only in the process of uninterrupted gas supplies to Europe.  In a situation where such supplies are completely stopped, technical problems will arise.  Pipes will begin to rust and will have to be replaced. 

At the same time, in the context of sanctions and currency restrictions, there are no resources for the implementation of such investment projects. 

Equipment conservation is always a financially costly undertaking.  Significant additional costs arise in the event of shutdown and conservation of the gas distribution system. 

At the same time, it should be noted that Russia currently does not profit from gas trading.  Russia profits solely from the sale of crude oil.

[Agathamay]

Russia walked this backed: https://www.reuters.com/business/energy/russia-will-not-demand-immediate-switch-gas-payments-roubles-kremlin-2022-03-30/

Their messaging is confusing and their economy is too fragile to further restrict themselves from global commerce, so you can expect something like this to not go through. It sounded like an empty threat from the start and a mere desperate attempt to avoid sanctions. Appears Russia still has India and China open to them for unrestricted trading, but they cannot reasonable expect to cut off trading from the rest of Europe and keep their economy afloat.

Yeah, I don't expect them to just shut it off. This is more posturing but they might eventually go on with it in the future. After all this means they'd be getting Euros in exchange.

The action of shutting off would really be not immediate as there are some existing contracts that need to be filled.
Maybe, after those contracts expired, European countries will assess the situation and push thru the shutting down of Russian services.
But if they can't find immediate alternatives or replacement, they may possibly continue to pay Russia, but now in rubles.
They will definitely weight the situation, but they won't be shutting down Russian gas if they can't find alternatives.

Turning off the gas is a serious technical problem. 

The equipment can function effectively only in the process of uninterrupted gas supplies to Europe.  In a situation where such supplies are completely stopped, technical problems will arise.  Pipes will begin to rust and will have to be replaced. 

At the same time, in the context of sanctions and currency restrictions, there are no resources for the implementation of such investment projects. 

Equipment conservation is always a financially costly undertaking.  Significant additional costs arise in the event of shutdown and conservation of the gas distribution system. 

At the same time, it should be noted that Russia currently does not profit from gas trading.  Russia profits solely from the sale of crude oil.

It could be easy to shut off these pipelines as easily as it is to operate. It only needs proper and regular maintainace to keep it in good shape. I don't see any technical problems that may arise. 

[DrBeer]

Turning off the gas is a serious technical problem. 

The equipment can function effectively only in the process of uninterrupted gas supplies to Europe.  In a situation where such supplies are completely stopped, technical problems will arise.  Pipes will begin to rust and will have to be replaced. 

At the same time, in the context of sanctions and currency restrictions, there are no resources for the implementation of such investment projects. 

Equipment conservation is always a financially costly undertaking.  Significant additional costs arise in the event of shutdown and conservation of the gas distribution system. 

At the same time, it should be noted that Russia currently does not profit from gas trading.  Russia profits solely from the sale of crude oil.

1. The gas distribution system that you are talking about now does not have significant critical restrictions when gas pumping is stopped. "Freezing" of a segment or even a significant part of such a system will not lead to irreversible processes.
2. Another thing is the transport/transit system pumping gas from wells to the GDS system from the first point. Leaving her without pumping is a completely different story. For example, you can pause pumping. And even within 2-3 weeks, no problems will arise. But in 6-12 months - it will arise! Moreover, these will be global problems for the entire industry. Let's move on to point 3.
3. Stopping gas production, yes, yes, this is exactly what will happen during a long stop of pumping through transport channels. The first reason is that Russia does not have a mega storage for gas, they have always used Ukrainian storage for the most part. The second reason is gas production technology. You can't just pick up and press the "pause" button. With a long idle time, the gas must either be burned or the well must be "frozen". It's stupid to burn gas, of course the Russians can. But given the prospects for sanctions, it will be necessary to burn until the reserves are depleted. Freezing - allows you to save stocks. But there is a problem - reactivation requires technologies and equipment that the "great oil and gas power" does NOT have! And because of the sanctions will not ...
Then think for yourself

[Mometaskers]

Russia can totally go on with this plan, it's not like a new source would just magically appear to replace the gas it's supplying Europe. It would take years to build new pipelines to other existing sellers as well as building renewables to cover a portion of the energy need.

I do believe that Russia isn't going to immediately start charging in rubles (this is just me trusting they'd honor existing contracts) but it would in the near future.

[DrBeer]

As you noticed, the key players sent Russia with its nonsense and regular demands. Yes, rightly noted - there are contracts, and many of them end no earlier than 2025 and beyond. What does it mean ? This means that Russia will be forced to comply with the terms of supply, and the West, in the current situation, has a free hand and can impose any sanctions restrictions on the supply of these resources from Russia to the world market. The result, I think you can imagine? Yes, I agree - India and China will now buy up unsold surplus oil and gas from Russia at a bargain price, dictating to Russia the price at which they will be ready to buy. And Russia will dutifully sell them to get at least some benefit from the collapsing industry.

[CaptainCrapper]

Putin has threatened so-called unfriendly states to pay in rubles or have their gas supply shut off. It has said it doesn't buy things for free and so isn't going to be charitable with its energy.
Europe has kicked against this with Germany saying it's being blackmailed by this move. What other choice does Europe have with Russia alone selling about 40% of energy to the world?

If it is possible I think the whole world will divert with china so we are waiting for good something no wair we want to pech as soon as possible any how. so we are waiting for a good world.

[Fortify]

Putin has threatened so called unfriendly states to pay in rubles or have its gas supply shut off. It has said it doesn't buy things for free and so isn't going to charitable with its energy.
Europe has kicked against this with Germany saying its being blackmailed by this move. What other choice does Europe has with Russia alone selling about 40% of energy to the world.

There is a lot of bluster and idle threats between the two countries, but it's a catch-22 situation for Russia right now. They produce very little else that is desirable to Europe, so the biggest and possibly only economic threat the can use to counter all the sanctions imposed against them is oil and gas. Yes it would hurt Europe, but in the short and long run it would hurt Russia much more. Europe is the most premium paying market for Russian oil and gas, paying almost half a billion per day and once those taps get turned off - there will be no chance of turning them back on again and rerouting that supply to much cheaper paying markets would take a very long time. Russia is playing a very dangerous game threatening to turn the supply off, which is why that has been kept relatively quiet for as long as possible, if they were truly serious then it would have been turned off weeks ago.

[Smartprofit]

In my opinion, this is a very irresponsible geopolitical game. 

Russia is a European country.  Russia is not China or Asia.  The theory of Eurasianism is the most ridiculous and terrible thing that happened in the history of Russia. 

Network effects have not been canceled.  To function successfully in the world, it is necessary to actively trade and interact with other countries. 

At the same time, you need to take care of your customers (and not threaten them or hit them on the head with a stick).  European countries (including Ukraine) are the best buyers of Russian gas and oil. 

Russia is very lucky to have such a competitive advantage - a powerful oil and gas industry.  This industry was created by several heroic generations of Soviet people after the end of World War II. 

But without adequacy, any competitive advantage is meaningless.

[Ozero]

Russia can totally go on with this plan, it's not like a new source would just magically appear to replace the gas it's supplying Europe. It would take years to build new pipelines to other existing sellers as well as building renewables to cover a portion of the energy need.

I do believe that Russia isn't going to immediately start charging in rubles (this is just me trusting they'd honor existing contracts) but it would in the near future.

I do not think that this blackmail will work with Putin. Europe has realized its mistake, having become dependent on energy carriers from Russia, and urgently, as far as possible, corrects the situation. Already in March, Russia received only 38% of the planned income from the sale of energy resources. Russian oil storages are full. One by one, private companies and entire countries refuse to buy Russian oil and gas. Ports refuse to transship oil, and insurers refuse to insure.

The list of countries that are still buying Russian oil and gas and not reducing volumes includes China, Hungary, and Indonesia. Some, such as Germany, Italy and several other Western countries, are either reducing supplies or planning to do so in the near future until they are completely abandoned.
India is now taking advantage of the situation and buying oil from Russia at almost half the price. But she doesn't need a lot of oil. Therefore, India will not save Russia in this regard. In the medium and long term, Russia will lose very big.

[justdimin]

Russia can totally go on with this plan, it's not like a new source would just magically appear to replace the gas it's supplying Europe. It would take years to build new pipelines to other existing sellers as well as building renewables to cover a portion of the energy need.

I do believe that Russia isn't going to immediately start charging in rubles (this is just me trusting they'd honor existing contracts) but it would in the near future.

Gas is an energy source that could be replaced mainly, and if Russia goes down this road, which they already have that will result with European nations building faster and faster renewable energy sources. Right now, wind and solar getting so much attention that we are seeing it built every single day, like crazy.

Interestingly what this war did for climate change, politicians haven't done it in years, we are actually on a better road right now to save the world. This is why they could request ruble for now, but they will be getting much less money in the near future, and I mean like in a year or so it will start to show itself. They screwed themselves with this war for sure. Maybe not today, but for the future.

[retreat]

To be honest, if European countries don't want to freeze to death then they inevitably have to obey the rules set by Putin. This step actually looks cruel but I see this is the last step from Putin to escape the sanctions imposed on Russia.

That's not true, the risks are not nearly as high as you present them, which is why the EU must impose a gas embargo on Russia. There's the statement that EU already has enough gas till the end of winter. Now it's getting warmer, so the matter of gas will become relevant from the next heating season, starting in October. It's half a year away from now, and Germany buys around 40% of gas from Russia (so more than half is already covered by other sources). Also, the US said it'll help EU (and US has quite a lot of gas). Not to mention that if the Western world acted more swiftly right now, they could make the war end sooner, and then they could work out new deals with the new Russian government, including gas deals.

this is good news, I hope that what they say is true, because what I see on the news today, that germany is experiencing an energy crisis and their gas reserves are running low. I know that western countries and the US will try to protect friendly countries, but how long will Putin endure this attack?

[Sithara007]

The price of liquefied natural gas (LNG) from the U.S. is at least 30-40 percent higher than Russian pipeline gas, Russia's Energy Minister Alexander Novak said on Saturday.According to Russian news agency Tass, Novak said that the U.S. wants Europe to buy its LNG but the price of which is at least 30-40 percent higher than Russia's piped gas.

So before all these events even Russia barely manages to claim its gas is 40% cheaper than LNG.

Those are the prices when supply is regular. Once Russian gas is taken out of the equation, the demand for US LNG will increase manifold. The prices Europeans need to pay will be a lot higher than what they paid in 2021. There are a limited number of LNG terminals operating in the US and the output volume is not infinite. And it is ridiculous to even claim that LNG that needs to be transported more than 10,000 km with multiple regasifications can be traded at the same price as pipeline natural gas.

[Darker45]

To be honest, if European countries don't want to freeze to death then they inevitably have to obey the rules set by Putin. This step actually looks cruel but I see this is the last step from Putin to escape the sanctions imposed on Russia.

That's not true, the risks are not nearly as high as you present them, which is why the EU must impose a gas embargo on Russia. There's the statement that EU already has enough gas till the end of winter. Now it's getting warmer, so the matter of gas will become relevant from the next heating season, starting in October. It's half a year away from now, and Germany buys around 40% of gas from Russia (so more than half is already covered by other sources). Also, the US said it'll help EU (and US has quite a lot of gas). Not to mention that if the Western world acted more swiftly right now, they could make the war end sooner, and then they could work out new deals with the new Russian government, including gas deals.

this is good news, I hope that what they say is true, because what I see on the news today, that germany is experiencing an energy crisis and their gas reserves are running low. I know that western countries and the US will try to protect friendly countries, but how long will Putin endure this attack?

There are different, even opposing, analyses as regards Germany's fate should it decide to wean itself completely from Russia's gas and oil and even coal. But the numbers don't lie and that Germany is in fact heavily reliant on Russia with regard to these goods. This must be the reason why Germany was more careful in their steps when Russia started to invade Ukraine. But eventually it seemed Germany had to take that bold step. It is either they will remain hostage by Russia or they will contribute pressure for Putin to stop his madness. And Germany chose the latter. It is now their responsibility to urgently find alternatives.

Putin may do away with any timeline. He may send Russian troops to Ukraine no end regardless if they come home alive or not. But how long do Russians endure their leader's madness?

[Nerdy doctor]

Russia's military aggression against Ukraine has not yet subsided. In Russia, they realized that they could not effectively attack Ukraine from three sides, as they had previously counted on the minimum resistance of the Ukrainian armed forces. The Armed Forces of Ukraine, having already 8 years of experience in military operations, very competently took advantage of the situation and do not arrange frontal battles, but operate in small groups with the support of artillery and aviation, inflicting pinpoint and tangible losses on the enemy. Therefore, in the first month of the war, Russia lost more than 40,000 people killed, wounded and captured. Military equipment "the second army of the world" has already lost about 40 percent, eight of the ten invading armies of Russia.

They can try any tactics they want to try, it will not succeed for one simple reason. Russia is fighting with soldiers, and that makes sense, people who have military experience and guns and armour and weapons and tanks etc etc, that is how you go to a war. However, Ukraine has the advantage of the fact that they are fighting as a whole nation. Sure there are some people who are fleeing the nation and going to other nations.

But, every single person who stayed back, will be fighting Russia. So, it is not about Russia military versus Ukrainian military, it is more like Russian soldiers vs EVERYONE in Ukraine right now. This is why they are failing, and will keep on failing.

Yes, most middle aged men stayed behind and joined the army. They know the terrains better then the Russians and could in small groups ambush and inflict some serious damage. And fighting from three fronts probably stretched them far out.

[be.open]

There are different, even opposing, analyses as regards Germany's fate should it decide to wean itself completely from Russia's gas and oil and even coal. But the numbers don't lie and that Germany is in fact heavily reliant on Russia with regard to these goods. This must be the reason why Germany was more careful in their steps when Russia started to invade Ukraine. But eventually it seemed Germany had to take that bold step. It is either they will remain hostage by Russia or they will contribute pressure for Putin to stop his madness. And Germany chose the latter. It is now their responsibility to urgently find alternatives.

I think Germany's problem is that there is no alternative to Russian pipeline gas right now and even in the next year or two. There is not enough gas supply on the market to replace the volumes that fell in the event of an embargo and will not be in the near future, there are not so many tankers and so many terminals for liquefied gas, and it takes time to build them. Under Merkel, Germany fell under the political influence of the Greens and closed its nuclear power industry, from 01/01/2022 three of the six German reactors were shut down, and from 01/01/2023 the other three will also stop. Cheap Russian pipeline gas is needed for German industry and as a raw material for fertilizers, even if it can be replaced with liquefied gas, it will be noticeably more expensive and this will make production in Germany simply uncompetitive. And in the absence of wind and generation on windmills, the embargo on Russian gas can even de-energize Germany.

[LUCKMCFLY]

Putin has threatened so called unfriendly states to pay in rubles or have its gas supply shut off. It has said it doesn't buy things for free and so isn't going to charitable with its energy.
Europe has kicked against this with Germany saying its being blackmailed by this move. What other choice does Europe has with Russia alone selling about 40% of energy to the world.

The alternatives are in South America, through Brazil, Colombia and Venezuela, if you can buy it, the only thing is that the gas will be much more expensive, but there are alternatives, large gas pipelines can be built so that they can reach Europe much faster, that is an option because I do not see Europeans with gas cylinders on the streets, even more so when they are used to gas coming through their respective internal pipes.

The problem has worsened, but I think that both the USA and Europe began to impose very radical sanctions without taking into account the risks for themselves, the USA bowed its head against Venezuela and if Europe does not want to bow its head, it has to look for alternatives quickly.