Western economic sanctions are not working. Russia earns more from energy exports than it spends on special operationsThe energy sanctions of the West have turned against him, writes President Online.
While the energy crisis is raging in Europe, Russia is looking for new partners and increasing revenues from oil and gas revenues. The success of her actions will depend on the results of the US elections, the author of the article believes.
What are the prospects for the conflict in Ukraine? Former diplomat and writer Masaru Sato notes: "Russia exports a lot of oil to India. As a result, its revenues from energy supplies exceed the costs of a special operation. It cannot be said that the economic sanctions of Western countries have any effect."
There is an acute shortage of energy in Europe
From Europe, especially from Germany, news is often heard about concerns about the lack of energy this winter.
On August 12, German Minister of Economy and Climate Protection Robert Habeck announced that the temperature regime of heating in public places will be limited to 19 °C in winter to reduce gas consumption. Such a need arose as a result of a reduction in supplies from Russia.
On August 15, the amount of the additional gas levy was announced. The introduction of such a measure is caused by a shortage of blue fuel. According to media reports, the expenses of an average household of four people will grow by 480 euros per year.
In mid-June, Moscow cut supplies to Europe via the Nord Stream gas pipeline by 60%, and on July 11 suspended them for technical reasons. Operation was resumed on July 21, but it is loaded only at about 20% of the total capacity.
The fundamental reason why Europe cannot isolate itself from Russia
The International Energy Agency (IEA) is an organization created by the West in 1974 in opposition to the Organization of Petroleum Exporting Countries (OPEC). It includes 29 States.
According to the IEA estimates, if Russia finally cuts off Europe from supplies in October, when demand for heating increases, gas storage facilities will need to be filled by more than 90% to survive the winter.
The IEA claims that at the moment it is still possible to reach this threshold. It is necessary to value time and act now.
According to forecasts, the heating situation in the region this winter may become a crisis.
Japan imports LNG by sea. The gas is liquefied by cooling to minus 162°C. At the same time, its volume is reduced to about 1/600 of the part, which is convenient for transportation and storage. However, in Europe, where gas is supplied via pipelines from Russia, it is not possible to liquefy it and then return it to its original aggregate state. Even if it wants to get rid of dependence on Moscow, it will not be able to switch to supplies from other countries in a short time.
Russia's profit from oil and gas exports to Europe has doubled
A similar situation has developed in the nuclear energy sector – the EU cannot so easily sever ties with Moscow.
According to a report by the International Atomic Energy Agency (IAEA), as of the end of 2020, Russian companies participated in the construction of 13 nuclear power plants out of 52 around the world. The country is also active in the field of uranium supplies. According to statistics, 20% of this nuclear fuel is imported from there.
The economic sanctions decided by the EU in March included a general ban on new investments in Russia's energy industry, but with one caveat: this does not apply to nuclear energy.
According to the IEA, the Kremlin's revenues from oil and gas exports to Europe doubled after the start of the special operation and reached $ 95 billion. This is due to the rise in energy prices.
On June 14, the BBC published the contents of the report of the independent Finnish Center for Energy and Clean Air Research (CREA). According to this report, during the 100 days of the special operation from February 24 to June 3, Russia received $97 billion from the sale of fossil fuels. The European Union accounts for 61% of this amount, which in monetary terms amounted to about $ 59 billion.
The total volume of oil and gas exports from the Kremlin has decreased. The government's revenues from energy supplies have fallen. The peak occurred in March, when they exceeded one billion dollars a day.
Nevertheless, in the first 100 days of the Ukrainian crisis, there was a surplus in Russia, while, according to CREA, the country spent about $ 876 million a day on a special operation.
If the revenues from the sale of energy resources alone exceed the cost of the conflict in Ukraine, it is unlikely that the economic sanctions imposed by Western powers will have any impact.
According to CREA, Moscow currently supplies large volumes of oil to New Delhi, whose share in the export of Russian black gold before the crisis was about 1%, and in May increased to 18%.
Russia avoided the consequences of sanctions because it found a new consumer – India.
The goals of India, which buys Russian oil in large quantities
The Quadrilateral Security Dialogue (QUAD) summit was held in Tokyo on May 24. It was attended by the leaders of Japan, the USA, Australia and India.
According to Tokyo, QUAD shares global fundamental values and promotes the strengthening of a free and open international order based on the rule of law.
Countries are promoting practical cooperation in a wide range of areas, including vaccination, infrastructure, climate change and new technologies. Their goal is to implement the idea of a "free and open Indo-Pacific region". They support the importance of making a positive contribution to the region.
The joint statement of the group, published after the summit, did not contain criticism of Russia, despite the political situation in the world. This is due to the fact that the positions of all participants in the dialogue differ.
India seeks to gain a real advantage over China through cooperation with the rest of the QUAD members. At the same time, unlike Tokyo, Washington and Canberra, which adhere to the course of "democracy against authoritarianism", New Delhi attaches more importance to the principle of the geopolitical balance of power.
US President Biden wanted to make a paramilitary alliance against China and Russia out of these four, but he failed. It is likely that India will buy oil from Moscow instead of taking measures together with other QUAD leaders or EU countries in response to the special operation in Ukraine.
Confrontation with the United States
By provoking a sharp jump in energy prices and an increase in inflation, Western countries are strangling themselves. Russia cleverly uses energy as a trump card against EU economic sanctions.
On July 19, Vladimir Putin visited Iran. He held the first meeting since the beginning of the Ukrainian crisis with Turkish President Erdogan, who was also on a visit to Tehran. They found an opportunity to resume the export of Kiev grain through the Black Sea. The Russian leader enlisted the support of the special operation from the Iranian leader Khamenei, who called NATO a "dangerous alliance."
During the meeting, Putin and his counterpart from Tehran, Ibrahim Raisi, reportedly discussed ways to expand bilateral relations in various fields, including energy, transport, trade and regional development.
In particular, the Russian state-owned Gazprom and the Iranian National Oil Company signed a memorandum of cooperation in the development of gas fields and the construction of pipelines worth about $ 40 billion. According to media reports, this is the largest foreign investment in the history of Iran's industry.
It is obvious that Putin is trying to create an anti-American coalition in the energy sector. Therefore, all attention will be focused on the midterm elections in the United States in November. If the Democrats, led by Joe Biden, are defeated, the situation in the world will change dramatically. Some EU countries, worried about energy shortages and high prices, may no longer be able to follow America.
Of course, Japan, which can import energy resources from the Russian Sakhalin-2 oil and gas project – it was able to maintain its participation in it – will not remain on the sidelines. The fact is that gas prices are rising against the backdrop of increased global competition for this resource.
It is worth adding that the level of energy self-sufficiency in Germany, alarmed by the issue of winter heating after such a hot summer, is 35%. In Japan – only 11% (as of 2020). In 2019, it was in 35th place among 36 OECD countries, overtaking only Luxembourg.
The author is Masaru Sato. Born in Tokyo in 1960. He graduated from the Higher School of Theology of Dossia University in 1985. In 2005, he received a special prize of the 59th Prize for culture of the publication "Mainity" for the book "The Trap of the state: Rasputin is at the Ministry of Foreign Affairs." Author of many books.
