The energy war accompanying the conflict in Ukraine took a dramatic turn this Tuesday (14): Russia announced that it will cut off 40% of the supply of natural gas through the main route that supplies Germany.
Russian state-owned Gazprom’s justification is technical, but not too much: it claims that the station where the gas is compressed for more than 1,000 km under the Baltic Sea to reach Lubmin is missing from the station where the gas is compressed.
The compressors were not shipped due to European sanctions against Russia, imposed in the wake of the February 24 invasion of Ukraine. “Gas supply via the Nord Stream 1 pipeline can currently take place with an amount of up to 100 million cubic meters per day”, stated Gazprom.
The volume is 40% less than the daily capacity. Until now, the Russians had only cut off supplies to countries that refused to pay for energy in rubles, a maneuver used by the Kremlin to appreciate its currency.
Through Nord Stream 1, a project inaugurated in 2012, up to 60% of Russian gas sold to Germany passes annually. Its twin branch was completed in September last year, and would remove all transit of the product to Europe’s largest economy from the former Soviet gas pipelines that pass through Ukraine.
Berlin, under Prime Minister Olaf Scholz since December, froze Nord Stream 2 due to the danger of war and then shut it down in practice with the invasion. But the German attitude is considered ambiguous, and the government was asked this same Tuesday by President Volodymyr Zelensky to be tougher on Moscow.
It’s a complex snooker. Around 40% of Germany’s energy needs by 2021 were met by Moscow. Scholz accepted the gradual reduction in the purchase of oil, while the European Union pushed for a total embargo, but so far no one has had the courage to mess with the gas.
The gigantic Russian fields are the engine of European industry, and in the case of gas there is the most obvious political component: the heating of homes is usually done using the input. At the moment Europe is under the heat of summer, but the rigors of winter and the mood of voters are just around the corner.
Kiev’s complaint, which has been emulated for years by the United States and the United Kingdom, far from this dependence, is that Vladimir Putin finances its economy and its war machine with such an attitude. A study released this week sheds light on the issue.
By the Helsinki Center for Energy and Clean Air Research, the analysis shows that Moscow earned $97 billion in the first 100 days of the war selling energy — roughly $1 billion a day. “Values ​​have been falling since March, but are 60% higher than in the same period last year,” says the report.
This is with an average discount of 30% that Rosneft, the Russian Petrobras, has given to whet the appetite of new customers, such as India – which bought more Russian oil in the first quarter of this year than in the entirety of 2021, and wants more.
This compensation involves the increase in hydrocarbon prices, which has helped to generate inflation registered in Europe and the US, the highest in 40 years. This all comes at a political price, leading to what the German government has called “Western fatigue” with the war and the consequent support for Kiev’s defensive belligerence.
In Russia, oil pays royalties directly to the Treasury, thus being able to be seen as an engine for the defense area. According to the Finns, 63% of Russian energy gains come from this sector. Russia’s Ministry of Finance said $25 billion was spent on defense from January to April, but the figures seem unreliable.
Gas, which accounts for 32% of the amounts, is a private matter for Gazprom — which, as the largest company in the country and involved in various fields of activities, ends up being an inducer of the Kremlin’s effort to survive the sanctions applied by the West and its allies. . It pays dividends to the state, its controller, but not royalties.
