Putin’s plot to blackmail Europe backfires as Russia’s cash reserves plummet after gas cut | Science | New

Russian President Vladimir Putin’s efforts to blackmail Europe into cutting off its gas supply appeared to backfire after Russia’s budget surplus shrank following supply shortages and EU sanctions. West. It is now down 482bn rubles (£6.8bn) in the previous month’s cumulative data.

This is despite supply restrictions from Russia that have driven its energy giant, Gazprom, to rake in record profits as the price of gas soars. Putin’s invasion of Ukraine and the gradual reduction in gas flows combined to drive up prices, initially boosting Kremlin revenues.

But economists have sent the Russian president an alarming warning that the surplus is expected to turn into a deficit this month. It sells much less gas to the EU, which received 40% of its gas from Russia last year.

It comes after Moscow suspended gas flows through the main Nord Stream 1 gas pipeline linking Russia to Germany via the Baltic Sea, blaming it on infrastructure repair problems.

Kremlin spokesman Dmitry Peskov told Russian state television: “If the Europeans take the absolutely absurd decision to refuse to service their equipment, or rather, the equipment that belongs to Gazprom, but “They’re contractually bound to maintain, it’s not Gazprom’s fault. It’s the fault of those politicians who made decisions on sanctions.”

Gazprom said flows would not restart until “equipment operating issues are resolved”. And it came after the public conglomerate had already reduced the operational capacity of the system to just 20% of its normal levels.

But while previous cuts sent the price of gas in Europe skyrocketing, benchmark gas futures in Europe fell as much as 9% to their lowest level in a month on Monday. And it came as EU energy ministers met as the bloc struggled to avert a winter crisis amid Putin’s supply shortage, drawing up emergency measures such as limiting the demand for electricity.

As members across the bloc failed to agree on capping the prices of imported Russian gas, fuel prices have fallen 40% from highs reached last month at €192 (£166) per megawatt hour.

It comes after European Commission President Ursula von der Leyen said the bloc’s proposals to tackle the energy crisis would lower prices in Europe “while ensuring security of supply”.

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While Germany, the Netherlands and Denmark fear that a price cap could worsen Europe’s energy security, as it would be more difficult to attract supplies in the competitive global market for gas prices Liquefied Natural Gas (LNG), Italy and Poland say a price cap would help protect consumers and industries from soaring prices.

But despite the disagreements, Swedish Energy Minister Khashayar Farmanbar said “everyone is in a hurry to find a solution”.

Negotiators appeared to align more closely with other measures such as a windfall tax on the profits of energy giants that rake in excess revenues from wind, nuclear and coal power that have been able to sell their electricity to record prices due to soaring gas costs.

Irish Environment Minister Eamon Ryan said: “It makes sense to take some of that excess profit and recycle it back into households.”

The proposals are due to be unveiled today, with another emergency meeting scheduled for later this month to approve the final plan.

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As the EU has argued that Russia is ‘arming’ gas supplies and trying to blackmail leaders in an attempt to lift crippling sanctions, Moscow says the West is launching an ‘economic war’ amid the crisis. invasion of Ukraine.

But despite imposing a series of harsh sanctions aimed at hitting the Russian economy, the bloc has still handed billions to Putin for energy imports amid the war, as it relies heavily on Russian gas in particular. .

And, according to a report by Reuters news agency, Russia is set to earn more than $337bn (£288bn) from its energy sales this year, a 38% increase on the previous year. ‘last year.

However, the EU imposed an oil embargo on Russia and drew up a plan to completely sabotage energy ties as part of its REPowerEU strategy. Under this, it will phase out all Russian gas and replace it with supplies from alternative producers and source more energy from renewables.

Mary I. Bruner