Russian Gas ban - A problem for Europe or suicide for Russia?

[be.open]

Germany doesn't have an agreement with Qatar but there is another player that you haven't accounted for. US going to apply pressure on the oils cartel with NOPEC bill that allows US to sue the oil cartel or its members, force them to increase their oil production or risk of their assets frozen in US banks or no business with US's entities. If those cartel doesn't like it, they can open up a shooting war with US which I'm sure US will be happier to have more oil country under their control.

This has nothing to do with gas supplies to Europe. However, the best the US can do about the oil shortage is to increase its own production or spend strategic reserves. Attempts to pressure the cartel are ridiculous. Even Brazil said "no" to the US request to increase oil production, arguing that it was a matter of business strategy, not diplomacy and political speculation.

[19Nov16]

The threat of Russia to remove gas supply to Europe will certainly be a serious problem for Europe, now there are not many gas sources that can be a substitute for Russia, and I'm sure this will make the European economy and industry can be threatened, the other side of course this proves the power of Russia .

[pooya87]

1. Is the Russian economy self-sufficient or import-dependent?
2. Import-dependent economy, forced to buy something from exporters, what currency should be calculated?
3. And if everyone pays her for the main product exported by Russia, in rubles - where will Russia take the currency to pay for imports?

1. Apart from one or two countries every one else has an import-dependent economy. The ongoing conflict and its effects on all economies (excluding a handful) proves that.
2&3. Depends on the trading parties. The world has also been moving away from US dollar and SWIFT. For example Russian trades with India and China have been mostly conducted using other currencies including Ruble, and they went fully Ruble after the war started. Or for example Arabs started selling their oil to China using CNY and dumped USD.

Besides, anybody who refused to export to Russia or export using Ruble was immediately replaced by a competitor. For example I heard that imports of detergents and cleaners from Germany, Italy and Sweden were stopped and we immediately too over that market. We don't use SWIFT either.

Remember the main axiom - in fact, any step by Russia is "shooting yourself in the foot"! Why ? This question is for them Smiley

Now let me ask you another question. Is Europe economy export-dependent and how are they going to cover the billions of dollars deficits? For example the couple of markets that we took over in the past 2 weeks alone was estimated to increase our exports by $4 billion. That is $4 billion in 2 weeks that Europe will never see again. I don't know how much that is annually.
Don't you think Europe shot itself in the foot or maybe better said US shot Europe in the foot?

OK, Germany cannot agree with Qatar on the supply of liquefied natural gas. Qatar does not want to increase production

Gas production does not have a switch that you can flip and magically increase the production. There are a lot of limits and it would take them years to start new facilities and start extracting more gas. Not to mention that their supplies are still not enough to cover a small portion of what Germany needs.

or risk of their assets frozen in US banks or no business with US's entities.

I don't know if you follow the news but the Arabs have been panic selling any asset they had and could be seized ever since Russian invasion started and their assets were seized (China is doing the same too while eyeing Taiwan).
So far they've also refused to comply with US demands and their production has actually decreased ever since their facilities were bombed before the cease fire by Yemenis.

[be.open]

1. Is the Russian economy self-sufficient or import-dependent?
2. Import-dependent economy, forced to buy something from exporters, what currency should be calculated?
3. And if everyone pays her for the main product exported by Russia, in rubles - where will Russia take the currency to pay for imports?

1. Apart from one or two countries every one else has an import-dependent economy. The ongoing conflict and its effects on all economies (excluding a handful) proves that.
2&3. Depends on the trading parties. The world has also been moving away from US dollar and SWIFT. For example Russian trades with India and China have been mostly conducted using other currencies including Ruble, and they went fully Ruble after the war started. Or for example Arabs started selling their oil to China using CNY and dumped USD.

Besides, anybody who refused to export to Russia or export using Ruble was immediately replaced by a competitor. For example I heard that imports of detergents and cleaners from Germany, Italy and Sweden were stopped and we immediately too over that market. We don't use SWIFT either.

I think that the West was surprised by the calm reaction of the Russian banking system to the SWIFT disconnection (although it seems to be presented as an economic nuclear bomb). It turned out that the banking system of Russia is perhaps the most progressive in the world, without problems with legacy, mainframes, punched cards and cobols - flexible, manageable and easily customizable.

OK, Germany cannot agree with Qatar on the supply of liquefied natural gas. Qatar does not want to increase production

Gas production does not have a switch that you can flip and magically increase the production. There are a lot of limits and it would take them years to start new facilities and start extracting more gas. Not to mention that their supplies are still not enough to cover a small portion of what Germany needs.

But the gas pipeline has a valve that can be easily closed. Of course, Qatar already has buyers for the entire volume of liquefied gas and investments are needed to increase gas production. But it also needs the political will to do so. Europe froze Russia's money, which she paid for gas supplies, that is, Europe actually received gas from Russia for free. Plus, Europe has very strict antitrust laws, and Gazprom has already been subject to its penalties, in particular, initially the contracts included a ban on the resale of Russian gas, on the abolition of which Germany is now making good money by supplying gas in reverse to Poland. It will be very difficult for Europe to find gas suppliers other than Russia, so it will have to save a lot and maybe even choose between production and heating of residential buildings next winter.

[pooya87]

I think that the West was surprised by the calm reaction of the Russian banking system to the SWIFT disconnection

Well the plans were in motion for at least 8 years, need I remind you of Crimea annexation?

It turned out that the banking system of Russia is perhaps the most progressive in the world, without problems with legacy, mainframes, punched cards and cobols - flexible, manageable and easily customizable.

I'm not sure what you mean here, Russian banking system is just as bad as anybody else's. But the reasons why sanctions had a reverse effect was firstly because they were mostly jokes and also because Russia simply joined the multi trillion dollar economical infrastructure built and perfected over the past 43 years by the most sanctioned country in history Iran that is currently sitting among the 10 largest economies in the world (or 20 largest according to World's Bank).
They didn't really do much, they just hopped from one train to another while Europe keeps pumping Ruble's value and any imports that were stopped got replaced by competitors at cheaper prices with higher qualities!

But the gas pipeline has a valve that can be easily closed.

It can be closed but it can't be opened more than it already is.

Europe froze Russia's money, which she paid for gas supplies, that is, Europe actually received gas from Russia for free.

Last I heard it was a total of $5 billion Russian assets that were seized in which case Russia responded by seizing $500 billion Western investment in their country so by your logic EU is paying 100x for the gas.

[galambo]

Qatar is one of the major beneficiaries from this war, along with the United States. The EU will end up importing LNG from Qatar and the United States, which will cost them 5x when compared to the pipeline gas from Russia. And this is one of the reasons why the United States is pressuring the EU to stop gas and oil imports from Russia. Americans are planning to significantly increase the gas output and sell them to EU. And producers such as Qatar knows that their super expensive gas will never be able to directly compete with cheap Russian gas. And that is exactly why they are asking for 20-year and 30-year contracts. Once the contracts are signed, Europeans are fucked for ever.

So basically it's usa that is trying to play cold War tactics by not indulging directly with Russia rather try to give economic harms to Russia by pressing EU not to buy oil and gas from Russia. Qatar is known for selling his super expensive LNG to underdeveloped countries by bribing the authorities. I don't think its so easy for Qatar to fool EU and convince them to buy there expensive LNG.

[DrBeer]

Remember the main axiom - in fact, any step by Russia is "shooting yourself in the foot"! Why ? This question is for them Smiley

Now let me ask you another question. Is Europe economy export-dependent and how are they going to cover the billions of dollars deficits? For example the couple of markets that we took over in the past 2 weeks alone was estimated to increase our exports by $4 billion. That is $4 billion in 2 weeks that Europe will never see again. I don't know how much that is annually.
Don't you think Europe shot itself in the foot or maybe better said US shot Europe in the foot?

I'm happy to answer questions
Of course, the EU economy depends on exports! And now some numbers. Data for 2021 can be verified in open sources.
Export from the EU to Russia is about 90 billion per year. At the same time, for example, export to Ukraine is about 25 billion per year. This is so, to understand the scale.
And the total exports from the European Union amounted to 2.19 trillion. What is the share of Russia in this turnover? As much as 4 percent! Further continue? Leaving the market of Russia and Chinese companies will most likely lead to auto-compensation of these 4 percent, due to growth in interaction with China. In a word - for the EU economy, 4% will not be critical losses!

PS And please voice - which markets have you "captured" that the EU has now "lost forever"? And please tell me - what are the trends now in industrial production in Russia? Growing?

[be.open]

Europe froze Russia's money, which she paid for gas supplies, that is, Europe actually received gas from Russia for free.

Last I heard it was a total of $5 billion Russian assets that were seized in which case Russia responded by seizing $500 billion Western investment in their country so by your logic EU is paying 100x for the gas.

About $300 billion of reserves of the Bank of Russia in dollars and euros have been frozen, not counting the arrested private accounts, real estate and yachts. Of course, much less is confiscated, simply because it is more difficult to confiscate than to freeze, in many countries there is not even a legal basis for the confiscation of frozen assets, new laws need to be introduced or even amendments to the Constitution (as in Japan, for example).

[pooya87]

In a word - for the EU economy, 4% will not be critical losses!

Cool numbers, I just don't know why the news, the individual experiences, the all time high inflation rate and certain basic goods that are nowhere to be found are portraying something very different.
For example I see some industries around EU like most recent news about automotive parts manufacturers are reporting huge drops in their revenue this year and some industries are starting to shut down. UK alone is facing a "cost of living crisis" and the official reports guess a 1.5 million to start living at absolute poverty soon.

[Freeesta]

I think in this matter it is necessary to proceed from their own benefit. Will it be convenient for residents of countries that want to give up gas from Russia? If people do not feel the difference if the gas is purchased in another country, that's good. But if people suffer and a crisis begins in the country, then all these games are useless and only bring harm.

[MMA]

Qatar is one of the major beneficiaries from this war, along with the United States. The EU will end up importing LNG from Qatar and the United States, which will cost them 5x when compared to the pipeline gas from Russia. And this is one of the reasons why the United States is pressuring the EU to stop gas and oil imports from Russia. Americans are planning to significantly increase the gas output and sell them to EU. And producers such as Qatar knows that their super expensive gas will never be able to directly compete with cheap Russian gas. And that is exactly why they are asking for 20-year and 30-year contracts. Once the contracts are signed, Europeans are fucked for ever.

So basically it's usa that is trying to play cold War tactics by not indulging directly with Russia rather try to give economic harms to Russia by pressing EU not to buy oil and gas from Russia. Qatar is known for selling his super expensive LNG to underdeveloped countries by bribing the authorities. I don't think its so easy for Qatar to fool EU and convince them to buy there expensive LNG.

USA is no doubt influencer and tying to poke their nose in every issue. But i do not think that their tricks can be successful here. Russia have so many other option.  A lot of other countries in south Asia who need gas can import from Russia. For example India is a new gas and petrol buyer in big quantity. i think that in next days other countries like Pakistan will also import gas and petrol etc from Russia.

[lixer]

Firstly, not the EU but Germany! Secondly, the main problem that is being discussed now is the term of the contract. Qatar wants 20 years. And Germany has already launched a “farewell to Russian gas, oil and coal” program as part of a program to reduce emissions into the atmosphere, and according to the approved plan, Germany should reduce carbon dioxide emissions by 88 percent by 2040. This means that gas purchases should also be reduced until 2040, and not only in Russia. And 2040-2022 = 18, but not 20 years, do you get the point? I'm sure the issue will be resolved. The question remains unresolved - where will Russia put its gas, oil, coal, which no one needs?!

I am pretty sure that even if it was 18 years, they would still decline it because why would you put your nations money at a guaranteed purchase such a long time? I would guess that they would find another alternative for sure, and they will just focus on renewable energy more and more.

This is a great deal for the climate and the environment, this will help the world become better and the climate to cool down a bit with less coal, gas, oil to be used because they pollute the world a lot. This isn't just Germany, many nations are looking ways to be self sufficient and if you do not have oil or gas, then renewable is the only way to go.

[MinMan]

This happens when you chew Russian propaganda all day and forget about the context, clearly stated in every article.
So Gazprom made a huuuuuge profit of close to $21 billion in 2021, and this was a surprise because?

The company, which reported a net profit of 1.456 trillion rubles ($23 billion) for 2018, has been going through an unprecedented management reshuffle.

https://www.reuters.com/article/us-gazprom-results-idUSKCN1S51DU

So despite record gas prices, it was a worse year than a year we didn't have covid, can you now use your magical armchair general mega economist prediction skills and explain how the profit sank even with those x15 prices? As for the 10 countries that have accepted to pay in rubles, I wonder if anybody can actually prove that, unless we're talking about Ossetia, Abkhazia, Transnistria, Chechnya, and so on. Maybe we would have to add even Bartovia to reach 10.

Now, if you would have just accepted that bet about Russia conquering Ukraine in a few weeks and if the world would spring the other way around you would have had a full bitcoin by now. But, as usual, only talk, no spine!

First of all, they do add those places, and many other smaller ones that have to around there, but that's basically just a situation that was expected, pro-Russian states and "nations" do exist. Secondly even though the profits are lower compared to 2018, and even 2019 I am guessing, they did better than 2021 or so I am guessing, this is not a guaranteed thing, I have no data, I am just guessing.

So, they used pandemic profits vs current profits calculations to show that they are doing better, which of course they would if that's true because we had pandemic. I am still not sure if it was better though, I have no information regarding pandemic period profits.

[Sithara007]

USA is no doubt influencer and tying to poke their nose in every issue. But i do not think that their tricks can be successful here. Russia have so many other option.  A lot of other countries in south Asia who need gas can import from Russia. For example India is a new gas and petrol buyer in big quantity. i think that in next days other countries like Pakistan will also import gas and petrol etc from Russia.

Being a resident of India, I could say that here there is a lot of pressure on the government to get cheaper oil and gas. LPG and gasoline prices are at all time high, and the citizens are really unhappy about it. Russia is ready to sell crude oil to India at heavy discounts ($40 per barrel lower than the market rates). But transporting this much oil and gas from Russia to India is the biggest problem. There are not many supertankers available and even those available are hit by the sanctions and embargoes from the EU/US.

[galambo]

USA is no doubt influencer and tying to poke their nose in every issue. But i do not think that their tricks can be successful here. Russia have so many other option.  A lot of other countries in south Asia who need gas can import from Russia. For example India is a new gas and petrol buyer in big quantity. i think that in next days other countries like Pakistan will also import gas and petrol etc from Russia.

India may or may not go for Russian oil and gas but Pakistan was trying to have good ties with Russia. So as you said, USA jumped in and changed the regime in Pakistan. Imran Khan ex Prime Minister who was pro Russia is now replaced by a coalition government of 10 parties which are pro USA. This happened on 9 April 2022, see what USA is doing  to stop countries to going to Russia block.

[jaberwock]

Qatar is one of the major beneficiaries from this war, along with the United States. The EU will end up importing LNG from Qatar and the United States, which will cost them 5x when compared to the pipeline gas from Russia. And this is one of the reasons why the United States is pressuring the EU to stop gas and oil imports from Russia. Americans are planning to significantly increase the gas output and sell them to EU. And producers such as Qatar knows that their super expensive gas will never be able to directly compete with cheap Russian gas. And that is exactly why they are asking for 20-year and 30-year contracts. Once the contracts are signed, Europeans are fucked for ever.

So basically it's usa that is trying to play cold War tactics by not indulging directly with Russia rather try to give economic harms to Russia by pressing EU not to buy oil and gas from Russia. Qatar is known for selling his super expensive LNG to underdeveloped countries by bribing the authorities. I don't think its so easy for Qatar to fool EU and convince them to buy there expensive LNG.

It is guaranteed that Qatar will not be able to sell super expensive LNG to Europe, but imagine the size of the situation, if they agree to a deal, then they are going to make a lot more. Sure it will not be as profitable PER basis, but if we are looking at the totals then it's going to be something serious. Imagine selling 100 products to someone for 10 dollars each, that is 1k dollars, then imagine selling 1 million of the same thing for 1 dollars each, that is 1 million.

So the difference is staggering, and they could drop the price and remove the date stuff and they could make a ton of money that way as well. Doesn't mean they will, but they could if they reach an agreement.

[sovie]

Being a resident of India, I could say that here there is a lot of pressure on the government to get cheaper oil and gas. LPG and gasoline prices are at all time high, and the citizens are really unhappy about it. Russia is ready to sell crude oil to India at heavy discounts ($40 per barrel lower than the market rates). But transporting this much oil and gas from Russia to India is the biggest problem. There are not many supertankers available and even those available are hit by the sanctions and embargoes from the EU/US.

India is too good in deciding its foreign policy that best suits there national interest. India has good ties with both Russia and USA. Even in Ukraine war, India so far has manitained a neutral stance and that's something annoying for USA but still USA cant do anything since India is one of big powers of Asia region.

[bustabitsboy]

Being a resident of India, I could say that here there is a lot of pressure on the government to get cheaper oil and gas. LPG and gasoline prices are at all time high, and the citizens are really unhappy about it. Russia is ready to sell crude oil to India at heavy discounts ($40 per barrel lower than the market rates). But transporting this much oil and gas from Russia to India is the biggest problem. There are not many supertankers available and even those available are hit by the sanctions and embargoes from the EU/US.

India is too good in deciding its foreign policy that best suits there national interest. India has good ties with both Russia and USA. Even in Ukraine war, India so far has manitained a neutral stance and that's something annoying for USA but still USA cant do anything since India is one of big powers of Asia region.

In India, the government has taken the right stance to take care of its people. Every day there is a war on the planet. If a country does not take part in it, it needs to conduct its own policy. A country can allow famine and devastation if it follows someone else's prompt. I think in alliance with Russia and China this country will prosper.

[Sithara007]

Natural gas prices in Europe has spiked by more than 20% during the last 24-hours, after Gazprom suspended the use of the pipeline through Poland. Earlier, the Ukrainian authorities had reduced the amount of gas flowing through the pipeline on their side. This means that only the Nord Stream pipeline is transporting gas from Russia to Europe right now. If the supply is not restored within the next few weeks, then most of the heavy industries in countries such as Germany will be closed down and the EU will face tens of billions of USD in losses.

[galambo]

In India, the government has taken the right stance to take care of its people. Every day there is a war on the planet. If a country does not take part in it, it needs to conduct its own policy. A country can allow famine and devastation if it follows someone else's prompt. I think in alliance with Russia and China this country will prosper.

India has good ties with Russia but not that good with China. USA don't want India to have good ties with China and so far USA is successful in doing that. China and India have border issues which intensified recently, I don't see India going in friendship with China in near future.