Gas at differentiated prices: the devastating Russian strategy against Europe
Russia is preparing for a long-term war with the West and is therefore preparing energy strategies suited to this time horizon. The price of gas sent by pipeline to China is expected to fall steadily in the coming years, and become much lower than what Moscow sells to Europe, a Russian government document seen by Reuters on Friday shows.
Instead, oil exports from Russia are expected to decline next year, according to forecasts of Russia's socioeconomic development until 2026, while the price of Russian oil is expected to increase in 2024.
The Ministry of Economy did not respond to a request for comment.
The price of Russian gas has not been made public by the government and energy giant Gazprom since supplies began in 2019, while analysts have long suspected it was much lower than that sold by Russia to Europe.
According to the document, the price of the Russian gas pipeline for Turkey and Europe – which have seen a sharp decline in raw material imports from Russia due to Moscow's actions in Ukraine – is expected to fall this year to $501.6 per 1,000 cubic meters and $481.7 per 1,000 cubic meters. in 2024, while in 2022 it was equal to $983.8.
For China, it stands at 297.3 and 271.6 dollars respectively in 2023 and 2024. Practically just over half
Russian crude oil exports are also expected to decline this year to 247 million tonnes (4.96 million barrels per day) from 248.2 million tonnes in 2022. They are expected to fall further to 240 million tonnes per year next before recovering again to 247 million tonnes in 2025.
Russian Deputy Prime Minister Alexander Novak said Russia would extend a voluntary reduction in oil exports by 300,000 barrels a day until the end of the year “to maintain stability and balance” in oil markets.
The document shows that the export price of Russian oil is forecast at $71.3 per barrel compared to $79.6 in 2022 and $63.4 expected this year, above the $60 price limit imposed by the West.
A winning strategy in the long term
The application of a double price with notable differentials becomes an exceptional strategic weapon against the EU, primarily Germany, which made its industrial fortune precisely on the low price of gas. In this, Moscow has understood the strategic weight of its energy power and is now shifting the balance towards Beijing.
The effects will be serious, especially for German industry, which finds itself displaced in global competition by China, and, consequently, for Italy which has been reduced to subcontracting. The price applied to Chinese supplies is very far from the European one, too, so energy-intensive production, especially chemistry, now has a big advantage in China.
What can Berlin or the EU do? At this stage nothing, or almost nothing, other than trying to eliminate inappropriate costs to keep their industries alive. In reality, the environmental policies imposed at European level only worsen an already almost impossible competitive situation. Without urgent measures, a long-term deindustrialization is underway which is precisely among the strategic objectives of Moscow which, in a few years, will be the true winner of the dispute.
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The article Gas at differentiated prices: the devastating Russian strategy against Europe comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gas-a-prezzo-differenziato-la-devastante-strategia-russa-contro-leuropa/ on Mon, 11 Sep 2023 14:24:38 +0000.