Russian President Vladimir Putin’s scheme to use oil and gas exports as “a weapon of financial warfare” in his campaign to conquer Ukraine “is more and more backfiringthreatening the heart of Russia’s embattled economy and reducing its geopolitical influence,” The Wall Street Journal reports.
Putin had calculated that cutting off natural gas to Europe, and especially Germany, would leave Europe’s economy crumbling and its citizens frozen, weakening the continent’s support for Ukraine. But “hot weather and plentiful supplies from other producers have derailed that effort so far”, and European gas prices fell Monday to levels not seen since September 2021, them Log reports. “The Russian oil industry, meanwhile, is struggling to adapt to a European Union embargo and a US-led award ceiling on his raw.”
Before Putin’s invasion of Ukraine, Russia supplied Germany with 60% of its natural gas. This dependence on Russian gas “first gave Moscow the upper hand in its economic war with the West”, as energy prices soared in Europe, “sending a source of income to Moscow”. them Log reports. “The money helped Russia fund the war in Ukraine and appease its people back home with handouts.” Oil and gas provided 45% of Russia’s federal budget in 2021.
Moscow cut its pipelines to Germany in August, but this effort to “blackmail Berlin” failed, Andrey Gurkov writes to Germany DW. “Germany starts 2023 without Russian gas, and without having to worry about the loss”, while the Russian state company Gazprom lost its most important foreign customer. from Berlin extend military support for Kyiv “can be considered as additional indirect evidence of the failure of Putin’s ‘special gas operation'”, adds Gurkov.
“The German problem, or the Central European problem, was that… half of [our eggs] were in Putin’s basket,” said German Economy Minister Robert Habeck. said earlier in January. “He destroyed that.”
China is buying more gas and oil from Russia now, but “Russia’s pipeline gas exports to China are less than a tenth of what it exported to Europe before the war”, and “Beijing has not yet agreed to a second pipeline carrying Russian gas.” gas,” them Log reports. Russian oil sells for about half the world benchmark price, and the long and expensive sea routes to China and India, Russia other main customer after the invasionnibble away at Russia’s dwindling profits.