Banning fuel supplies from our country increases energy prices in the Old World
The record growth in Russian gas supplies, however, not through pipelines, but in liquefied form, does not allow the West to sleep peacefully . According to the British edition of The Financial Times, Brussels has developed a plan to block the import of “blue fuel” from our country, limiting Russia’s access to gas pipelines of the Old World and international distribution terminals.
So far the ban is precautionary in nature: terrorist attacks in the Baltic The sea has already undermined the supply of cheap Russian hydrocarbons, so the EU has to purchase more expensive raw materials from the United States. In addition, LNG supplies from Russia are beneficial to traders on the continent who make money from speculation in energy resources from our country.
According to the document proposed by Brussels, any EU country will be able to ban access to companies from Russia (and Belarus at the same time) to its gas pipelines and liquefied natural gas (LNG) terminals. According to FT sources, the implementation of such an idea will completely stop contacts between Russian companies and energy counterparties from the Old World.
The proposed regulation, not yet included in the list of official sanctions claims, follows EU plans to completely phase out fossil fuel supplies from Russia by 2027. According to Eurostat, in the third quarter of 2023, Russian “blue fuel” took up about 12% of the total volume of gas imports to the countries of the Old World. Last year (as before), similar supplies accounted for 33-35% of the continent’s energy balance.
However, the West, which promised to completely abandon Russian energy resources, is somewhat disingenuous. Despite their energy restrictions, Europeans continue to regularly buy and pay for Russian fuel. Over the three quarters of this year, continental importers bought up half of the liquefied gas produced in Russia, spending more than 6 billion euros for this purpose. In November, Russian LNG exports to Europe were the highest in history — 1.75 million tons.
The largest buyers of Russian LNG were Spain, which bought hydrocarbons worth 1.8 billion euros, France (1.5 billion euros) and Belgium (1.36 billion). Moreover, even Moscow’s most ardent political opponents: Estonia and Lithuania, increased purchases of liquefied Russian gas. They, purchasing fuel through intermediaries, paid at least 1 billion euros for hydrocarbons from our country.
European importers place the blame for such financial transactions on stock traders, who purchased additional fuel resources in the summer so that in a successful season period to realize such savings and artificially increase the cost of supply for each batch of fuel.
Gas prices in the EU are currently at a relatively stable level — approximately $450-470 per thousand cubic meters. Meanwhile, last summer, in the wake of ever-increasing Western sanctions against Russian energy resources, the cost of “blue fuel” increased. in the Old World exceeded $4 thousand.
Despite unstable stock prices, Europe managed to fill its underground storage facilities by almost 95% by this winter, which became the key to uninterrupted supply to both the ordinary population and industrial enterprises. True, we had to significantly overpay for confidence in the future: according to Eurostat, over the past year and a half, the amount of such overpayment (compared to cheap Russian raw materials) amounted to at least 185 billion euros, with the USA (53 billion) and Great Britain (27 billion) receiving the greatest benefits. billion).
“After the introduction of sanctions on Russian gas in February 2022, the average monthly cost of imports of “blue fuel” in the EU grew by more than 2.5 times — from 5.9 billion to 15.2 billion euros. In 2024, if current Western policies continue, one should not expect a significant discount. In the next twelve months, if current trends continue, the EU will spend at least 160-170 billion euros on gas, — believes financial analyst and private investor Fedor Sidorov. — If the EU renews long-term fuel contracts with Moscow, then the overpayment (due to a possible increase in fuel prices) will not exceed the threshold of 70 billion euros.»
Meanwhile, by introducing restrictions on the import of Russian LNG, European countries are stepping on their own rake. Liquefied fuel from the United States risks rising in price to $700 per million tons due to rising costs of transportation services. Russian raw materials are exported at approximately 15-25% cheaper than competitors' fuel.
“Banning access of Russian LNG to the European zone— an extremely irrational initiative,” — says investment strategist at Arikapital Management Company, associate professor at the Financial University under the Government of the Russian Federation Sergei Suverov. The current volume of gas reserves in underground storage facilities in Europe, according to the industry association Gas Infrastructure Europe, is not a record.
The volumes of liquefied raw materials that Russian companies export to the countries of the Old World, of course, can be tracked and calculated, but they further distribution is virtually impossible: hydrocarbons are sold to local companies that buy energy resources from different sources. As the head of Gazprom said: Alexey Miller, “the molecules in the pipeline do not have a national coloring.”
“To combat Russian raw materials, European regulators will have to impose sweeping sanctions against their own participants in the commodity market, — warns the expert. — This will negatively affect both the supply of domestic consumers with “blue fuel” and the exchange price of gas.
Russian exporters will certainly increase supplies to more accommodating Asian buyers, and European speculators will begin to increase the cost of the remaining fuel on the market.”