China News Service, April 1 (Reporter Meng Xiangjun) According to Russian media reports, starting from April 1, Russia will legislate to require countries "unfriendly" to Russia to pay for natural gas in rubles, otherwise there may be "no gas available".
The "ultimatum" issued by Russian President Vladimir Putin has expired!
However, the Group of Seven (G7) has rejected Russia's request.
Facing Russia's "killer weapon", what should some European countries that are highly dependent on Russian energy do?
Will the world energy market fluctuate violently?
[Russia's "Ultimate" has expired! 】
It has been more than a month since Russian troops entered Ukraine to carry out special military operations.
Through large-scale sanctions, the West launched a so-called "currency war" against Russia, depriving Russia of the right to use the SWIFT international settlement system, prohibiting it from trading in US dollars, euros, pounds, and yen, and freezing about 300 billion US dollars in Russia. central bank foreign exchange reserves.
The situation is critical, and the Russian side has to start the "Ruble Defense War", initiate capital controls, and limit the withdrawal of funds from foreign currency accounts to stabilize the domestic currency exchange rate and reduce the "lethality" of sanctions.
Russian President Vladimir Putin.
Recently, the Russian side made another move. The Kremlin Press Office stated that Putin asked the government, the Russian central bank, and Gazprom (hereinafter referred to as "Gazprom") to submit gas supplies to "unfriendly countries" before March 31. Reports settled in rubles instead.
Russian President's Press Secretary Peskov warned: Russia does not intend to "do charity" and provide free gas to Europe.
Very simple, only rubles, no money, no gas.
Russian gas enters Europe mainly through four routes:
1. The "North Stream-1" natural gas pipeline from the Baltic Sea to Germany, with an annual transportation capacity of about 55 billion cubic meters;
2. The "Yamal-Europe" natural gas pipeline from Belarus and Poland to Germany, with an annual transportation volume of about 32.9 billion cubic meters;
3. Transiting through Ukraine, through the pipelines of Slovakia, Hungary, Romania, Poland and other countries, the annual transportation volume is about 37.5 billion cubic meters;
4. The pipeline connecting Bulgaria, Serbia and Hungary via Turkey's "Blue Stream" and "Tu Stream", with an annual transport volume of about 40 billion cubic meters.
Schematic diagram of Russia's main natural gas pipelines to Europe as of 2021.
The green line is the completed pipeline, and the yellow line is the pipeline under construction, including the now frozen "Beixi-2".
Image credit: Statista
Originally, there was also the "Beixi-2" natural gas pipeline, which was finally built after years of hard work despite the obstruction of the United States during the German Merkel government's tenure, waiting to be opened.
However, since the Russian army entered Ukraine, the Scholz government has announced a freeze on the approval of the project.
At present, more than 40% of the EU's natural gas is supplied by Russia. In 2021, Russia's actual gas transmission to Europe will be about 155 billion cubic meters.
[Europe is determined? 】
On March 30, Putin spoke by phone with German Chancellor Scholz.
Putin said that Russia will use the ruble as the payment currency for natural gas supplies from April 1.
European contracting parties can pay in euros as usual, transfer the funds to Gazprom, and the bank will exchange them for rubles.
what does this mean?
According to the analysis, the Russian idea may be that the contract currency requested by the Europeans, such as the euro, has not changed, so continue to pay, that is, the natural gas is finally replaced by rubles, not euros. contract?
However, Scholz did not agree to the payment process, but asked the Russian side to provide written materials for a more accurate understanding.
At the same time, Germany announced that it has entered the early warning phase of the natural gas emergency plan.
In addition, according to Russian Presidential Press Secretary Peskov, the symbolic meaning of April 1 may be greater than the substance.
He said that the ruble buying mechanism will not suddenly start directly because "payment is a time-consuming process."
In other words, the Russian side has left a bit of buffer space, and it has to give others time to "adapt"!
It has to be said that Putin, as a senior strategist, has his own wisdom.
Even if it was severely sanctioned, Russia had previously stayed put and continued to stabilize its "exports" to Europe.
Gazprom also said it was at the "request of European consumers".
Putin did not directly "kill his breath" with Europe, but asked European governments to make a multiple-choice question.
Either they are concerned about the well-being of the people and agree to finally use rubles for gas exchange, and the conditions for the gas supply of honest sellers to Russia remain unchanged; or they refuse due to political stances, then those who ignore the interests of consumers are not sellers.
Data map: "Beixi-2" natural gas pipeline project landing facility pipeline.
This is a very realistic choice.
In fact, the demand and energy structures of the 27 EU member states are very different, and the internal divisions are huge.
On March 21, at the EU foreign ministers' meeting, Lithuania, Ireland and other countries called on the EU to increase energy sanctions against Russia and implement an oil embargo, while Germany and the Netherlands opposed it. In the end, the parties did not reach a consensus.
There is no way, the amount of Russian gas is huge and beneficial, and it suddenly disappears, which is equivalent to letting some countries "break their arms".
German "Der Spiegel" quoted the analysis of German economists as saying that considering the importance of Russian gas, European countries may have to buy rubles from the Russian central bank, which was previously sanctioned by it.
The ruble settlement issue will put enormous pressure on the West.
But in any case, Europe is determined to "de-Russify" the energy issue.
In early March, the European Commission proposed the "REPowerEU" energy independence plan, which aims to gradually get rid of the dependence on Russian fossil energy imports by 2030, and strive to reduce Russian gas imports by 2/3 within the year. At the EU summit on March 24 , the heads of member states also agreed to jointly purchase and store natural gas and hydrogen energy, hoping to reduce energy prices through common bargaining.
Reuters analyzed that it is difficult for the EU to find an exporter that can completely replace Russia in a short period of time.
Out of concern, energy prices soared in the international market, the Netherlands and the United Kingdom and other countries wholesale natural gas prices have risen by 20%.
[The United States is ready to let Europe pay for it]
The hesitation of some European countries on energy issues and the ongoing negotiations between Russia and Ukraine have made the United States unable to sit still.
US President Biden.
On March 23, local time, U.S. President Biden and his party arrived in Belgium, starting their first foreign visit since the outbreak of the Russian-Ukrainian conflict.
The next day, Biden attended the NATO summit, the EU summit, and the G7 summit in "three companies", and then made a special trip to Poland, a neighboring country of Ukraine.
It's too early to do it without profit. As soon as the Americans go there this time, they should hurry up to do business and let Europe place orders.
On March 25, Biden and European Commission President von der Leyen issued a joint statement announcing that the United States would help the European Union reduce its dependence on Russian fossil fuels and natural gas.
In 2022, the United States and partner countries will strive to supply 15 billion cubic meters of LNG to Europe, and the United States will supply an additional 50 billion cubic meters of LNG per year through at least 2030.
The U.S. LNG plant is producing at full capacity, but according to an analysis by Russia’s Economic Today Network, U.S. LNG is “a drop in the bucket” for Europe.
The U.S. will have to cut its supply to other places when it transmits gas to Europe, and the actual production capacity and long-distance transoceanic transportation are also difficult to deal with.
And to give up affordable Russian energy to buy high-priced American natural gas, Europe obviously has to pay more.
On March 24, local time, representatives of the Group of Seven (G7) and the European Union held a summit in Brussels, Belgium.
Image source: G7
Does America Really Care?
After all, Biden himself admitted at the press conference that the EU will indeed suffer losses by giving up Gazprom.
But he believes that this price can be exchanged for the "moral correctness" and "stronger strategic foundation" of the United States and its partners.
Everything is on point.
Through its trip to Europe, the United States has also stepped up its efforts to "beat" countries.
After the G7 summit, the United States and other participating countries issued a statement calling on oil and gas producers to "act responsibly" and increase their supply to the international market.
On March 28, after a video conference of G7 energy ministers, German Economy Minister Habeck said that the G7 unanimously agreed that paying for natural gas in rubles is unacceptable, and called on not to respond to Putin's request.
This shows that the major European countries in the G7 that are more dependent on Gazprom, such as Germany and Italy, have once again sided with the United States.
【The world energy pattern is about to change? 】
Singapore's "Lianhe Zaobao" pointed out that the United States intends to pressure Middle East countries to increase production, and even prepares to allow sanctioned Iran and Venezuela to export oil to hedge the impact of sanctions on Russian energy.
In this regard, UAE Energy Minister Mazroui said that the UAE will cooperate with the Organization of Petroleum Exporting Countries (OPEC) and OPEC+ to increase production capacity to 5 million barrels per day and strive for market stability.
But he also mentioned that, aside from politics, Russia's output is what the market needs now and no one can replace it.
Two of the OPEC+ members are currently under sanctions, and energy is "useless", and they are Venezuela and Iran.
Data map: Venezuelan President Maduro at the scene of the military exercise.
Reuters reported that the United States recently pledged to ease sanctions on Venezuela to allow it to export oil immediately.
Venezuela, of course, sees clearly in the face of the United States, which has fostered an opposition attempt to overthrow Maduro's regime.
The Venezuelan side proposed that if it wants oil, one is to recognize Maduro as the only legitimate government, and the other is to lift sanctions against Venezuela.
A person familiar with the matter said that the negotiations between the two sides have not progressed.
As for Iran, U.S. State Department spokesman Porter previously acknowledged that the United States and Iran may reach a new Iran nuclear deal in exchange for Iran's increase in crude oil supplies.
However, Iran proposed to lift the name of Iran's Islamic Revolutionary Guard Corps as a "terrorist organization", and the United States had to consider the mood of its ally Israel, and the prospects of the Iran nuclear negotiations are still uncertain.
There are other uncertainties.
The Houthis attacked an oil storage facility in Jeddah, Saudi Arabia, on March 25, marking an escalation in tensions in the world's main oil exporter.
Although this has little impact on the world, it still worries oil traders, according to an analysis by Bloomberg.
On March 25, local time, an oil facility in Jeddah, Saudi Arabia, was attacked by Yemen's Houthi rebels, and the scene was set on fire.
As the so-called feng shui turns, when Europe is in a turmoil, OPEC announces its best efforts, and the "old enemies" of the United States and Venezuela and Iran cannot talk about it, the South Asian "player" India comes on the stage.
The Hindu and Bloomberg reported that Russian Foreign Minister Lavrov visited New Delhi on March 31 to discuss the issue of Russia’s sale of crude oil to India, and to formulate a set of rupee-ruble-denominated payment methods for oil and other commodities, independent of the SWIFT system operate.
As the world's third largest oil importer, India has increased its purchases of Russian Urals oil several times in the past month.
According to the International Energy Agency, since the beginning of March, Russia has exported about 6 million barrels of oil to India.
By comparison, India bought 12 million barrels of Russian oil in all of 2021, according to CNBC.
According to foreign media analysis, India and Russia have had a long and fruitful cooperation in the military and other fields; even in the face of pressure from other members of the "Quad Security Dialogue" (Quad), namely the United States, Australia and Japan, India does not object to discounted prices. Buy Russian crude oil.
Data map: Traffic jams on the streets of New Delhi, the capital of India.
The British "Guardian" said in an editorial that, in fact, Russia's significance to the world far exceeds its status as the 11th largest economy in the world.
Russia's repositioning will shift oil, natural gas and coal exports from Europe and the United States to Asia, which will have a huge economic impact on the West.
The high price of energy has made the energy extraction industry profitable and may reverse the global trend in the use of renewable energy.
Russian Deputy Prime Minister Alexander Novak warned that abandoning Russian energy "will collapse the natural gas and oil market, and the increase in energy prices will be unpredictable." Up to 4,000 US dollars per thousand cubic meters (about 25,402 yuan).
And this, will not be the highest value.
(over)