“The question of hard reality”: why the EU failed to agree on the introduction of a price limit for Russian gas

EU energy ministers have not agreed on a price limit for Russian pipeline gas, European Commissioner for Energy Kadri Simson said.

“The ministers instructed the European Commission to study the possibilities of limiting the price of all types of gas received in the EU ... While all options remain on the table, the European Commission will present new proposals (to combat the energy crisis.

) next week,” Simson quotes TASS .

Earlier, EC President Ursula von der Leyen, announcing an initiative to impose a price limit on gas from the Russian Federation, called Russia an “unreliable supplier” and accused Moscow of manipulating the gas market.

“We are trying to reduce the cost of gas.

Therefore, we will propose a price cap on Russian gas,” von der Leyen said in a statement on the European Commission website.

- The goal is this: we must reduce Russia's revenues (from the sale of energy products.

)".

Recall that on September 9, a meeting of EU energy ministers was held in Brussels, at which the issue of setting a price ceiling for Russian gas was discussed.

According to Roberto Cingolani, head of Italy's Ministry of Ecological Modernization and Transformation, only three of the 27 EU countries have approved this initiative.

Another 15 states agreed to the introduction of a ceiling for fuel from all suppliers: in addition to Russia, according to him, we are talking about Norway, Algeria, Qatar and the United States, where a large amount of LNG comes from.

In particular, Hungary opposed the introduction of a price ceiling for Russian gas, calling it a hidden energy sanction.

The head of the republic, Peter Szijjarto, wrote about this on his Facebook page*.

Earlier, he noted that Budapest will do everything possible so that Brussels finally understands that gas supplies are “not a matter of ideology or politics, but of hard physical reality.”

“The plan, which provides for the introduction of a price limit exclusively for Russian pipeline gas, is completely contrary to the interests of Europe and Hungary,” Reuters quoted him as saying.

- This will lead to an immediate cessation of its (Russian gas.

) supplies.

You don't have to be a Nobel Prize winner to understand this."

According to the Financial Times, citing sources, a number of EU countries fear that Moscow, in response to the possible introduction of a price ceiling for Russian gas, will completely stop deliveries of blue fuel.

According to an unnamed senior EU official, "everyone is afraid of a domino effect" if Russia cuts off gas supplies, since European states are closely interconnected.

“If you block (deliveries.

) only Russian gas, then anger Russia without affecting other suppliers,” FT quoted him as saying.

According to the newspaper, the introduction of a price ceiling for Russian gas will require the approval of all 27 EU member states, but such unity among the members of the union is not observed now.

According to journalists, among the EU states that oppose Ursula von der Leyen's proposal are Italy, Poland, Greece, Hungary, Austria and the Netherlands.

• Meeting of the Council of Europe

• AFP

• © Patrick HERTZOG

Earlier, the Czech Republic, which holds the functions of the EU presidency until the end of the year, even announced its intention to remove the issue of introducing a ceiling on gas prices from the Russian Federation from the agenda of the EU ministerial meeting.

The head of the Ministry of Industry and Trade of the Republic, Josef Sikelu, informed members of the Senate of the Czech Parliament about this.

According to Sikelu, such a measure against Russia would be more of a political tool than a solution to the energy crisis in Europe.

“They only lead to disproportions”

In turn, Moscow has already announced what its reaction will be if a price ceiling for Russian gas is introduced.

On September 7, during a plenary session of the Eastern Economic Forum, Russian President Vladimir Putin called such a likely EU move "another stupidity", as well as a non-market and unpromising decision.

“All administrative restrictions in the field of world trade only lead to disproportions and higher prices,” the Russian leader explained.

According to him, if anyone in the West tries to implement the idea of ​​limiting prices for Russian energy resources, this will not lead to anything good for those who make such a decision.

“Among other things, there are contractual obligations, supply contracts.

And what, will some decisions of a political nature be made that contradict the contracts?

We simply will not comply with them and will not supply anything at all if this is contrary to our interests, in this case, economic ones, ”Putin stressed.

At the same time, while the EU is still thinking about the initiative of the head of the EC to introduce a ceiling on gas prices, Washington has already announced the date for the introduction of cap prices for oil from the Russian Federation by the countries of the G7 (G7), which, in addition to the United States, includes Canada, UK, Japan, Germany, Italy and France.

As Deputy Secretary of the Treasury Wally Adeyemo said in an interview with Yahoo Finance, this will happen closer to December 5th.

This decision was appreciated by State Duma speaker Vyacheslav Volodin, who said that the cost of Russian energy resources would be determined by "the market and contractual obligations."

“What officials of the G7 states call a price ceiling will be a floor.

The maximum price announced by the West will become the lower bar,” Volodin wrote in his Telegram channel.

According to him, the Western model of the global economy, which is based on colonial principles, "has outlived itself."

• Gas storage in Germany

• AP

• © Michael Probst, File

“There will be more shortages”

As Igor Yushkov, a leading analyst at the National Energy Security Fund, said in an interview with RT, if the European Union, as well as the United States and other G7 countries, nevertheless introduce a price ceiling for Russian energy resources, despite the fact that there is still no unanimity in the EU on this issue, Europoliticians will only make things worse for themselves.

“They simply will not receive gas and oil from Russia, which will further exacerbate the economic crisis unfolding in the West.

The Russian Federation openly says that it does not intend to supply hydrocarbons to those who try to purchase them at non-market prices.

And he has every right to do so.

It will not be difficult for Moscow, since the steps to limit the prices for energy resources from the Russian Federation are a direct violation of existing contracts, which Russia is not obliged to fulfill in this case, ”the expert emphasized.

According to Yushkov, with the introduction of a price ceiling for Russian gas in the EU, those countries that do not have alternative sources of blue fuel supplies will suffer first of all.

“This is Central Europe, all those states that do not have access to the sea.

But such a possible move by Brussels will have an extremely negative impact on the entire European Union, since there will be an even greater shortage of energy resources than now, prices will rise sharply and may reach $7,000 per thousand cubic meters.

The volume of LNG that is physically available to Europeans against the backdrop of a general fuel shortage will also be terribly expensive, ”the analyst said.

A similar position is shared by an industrial expert, Doctor of Economics Leonid Khazanov.

According to him, the still possible introduction of a price ceiling for Russian gas by the European Union will lead to a sharp shortage of blue fuel in the EU and the rapid depletion of its underground storage facilities (UGS).

“If autumn and winter are cold in Europe, UGSF reserves will be depleted in a short time.

And purchases of blue fuel in liquefied form do not compensate for gas supplies from Russia.

This process will grow like a snowball: power outages will begin, the temperature in houses will drop even more, industrial production will stop one after another.

As a result, all this will lead to a real freeze in the development of the EU, ”the expert said in a conversation with RT.

As a result, such negative changes will cause an increase in protest moods in European society, Khazanov believes.

“We are already seeing such processes, but the trend will only gain momentum, as the EU population is already tired of living in cold apartments and paying fabulous money for gas and other energy resources.

No one needs such sacrifices, except for European politicians,” the analyst stated.

• European Commission

• Gettyimages.ru

• © Christian Dauphin

According to Khazanov, one gets the impression that when proposing to introduce a ceiling on prices for Russian gas, the European Commission is thinking of only one thing: how to report to the US authorities on the work done.

“It is clear that the EC does not even think about how these measures will affect the well-being of the EU population.

They only care about their own interests.

If by doing this they wanted to prove something to Russia, then let them continue to do it in the dark and poorly heated premises of the EC, ”concluded the expert.

* Meta product, activity recognized as extremist, prohibited on the territory of Russia by decision of the Tverskoy Court of Moscow dated 03/21/2022.