Russia has benefited from a change in energy trade rules
By early June, a list of European countries was published and companies that rejected Russia's demand to pay for gas supplies in rubles were determined. The list of companies that reject includes six companies that supply Russian gas to 5 EU countries. The vast majority of European countries and companies representing their interests have adopted the new rules of the game dictated by Moscow. Does this mean that our country can celebrate success?
In mid-May, Deputy Prime Minister Alexander Novak said that the gas payment scheme proposed by our country in rubles using two Gazprombank accounts would affect 54 companies that provide Russian fuel to 27 EU countries. As of the beginning of June, when the round of payments according to the new rules was to take place for all partners, it is known that only six companies refuse.
These include the Polish group PGNiG and the Bulgarian Bulgargaz, the Finnish company Gasum and the Dutch GasTerra, as well as the Danish Orsted Salg & Service and the British-Dutch Shell Energy Europe. At the same time, it should be borne in mind that the companies complied with the political decisions of their governments banning them from buying Russian gas for rubles. The first five companies almost exclusively supplied Russian gas to their countries, which are now officially without our supplies – Poland, Bulgaria, Finland, the Netherlands and Denmark.
Shell Energy Europe stands out as one of several trading companies that bought fuel from Gazprom for the German market. Moreover, in extremely small quantities – only 1.2 billion cubic meters of gas out of more than 40 billion cubic meters that traveled to Germany annually from Russia. Accordingly, the rest of the German suppliers continue to safely supply Russian gas to Germany under the new rules.
“When evaluating the ongoing results of the transition to the new payment regime for Russian gas supplies, it is worth focusing on the facts. And here we see that from the list of European countries with a total annual supply of 155 billion cubic meters per year, only five countries have refused to pay in rubles – Poland, Bulgaria, Finland, the Netherlands, Denmark. This means that the “lost” volume of deliveries totaled 19.1 billion cubic meters per year, or 12%, “calculated TeleTrade analyst Alexei Fedorov.
In terms of Russian interests, the Nord Stream 1 gas pipeline dealt a major blow. through which gas Dutch, Danish and British traders received. Until recently, the pipeline was loaded to the maximum, pumping 55-50 billion cubic meters a year. It now loses contracts for 6-10 billion cubic meters per year.
Bulgaria received 3.3 billion cubic meters per year through the Turkish stream and Poland 10 billion cubic meters through the running Yamal-Europe gas pipeline through Belarus.
How will the “refugees” do without Russian gas? The Dutch are betting on Norwegian gas as well as liquefied natural gas (LNG), which is filled to capacity by British terminals. In the same way, the Danes are going to compensate for the losses. In addition, according to Western media, the Netherlands continues to buy gas from Russia – but only through other traders. Finland, on the other hand, has a floating LNG reception terminal on its shores.
Poland has long set itself the goal of leaving Russian gas and has prepared for it in advance. The Polish authorities are counting on their own LNG terminal as well as Norwegian gas, which should pass through the Baltic Pipe pipeline (but it will not be completed until the autumn). By the way, Warsaw has been actively buying Russian gas in advance this year and has managed to pump up considerable volumes into its underground storage facilities.
It will be the most difficult for Bulgaria, which theoretically counts on receiving Azerbaijani gas via Greece. The Greeks also have an LNG reception terminal from which they can supply liquefied gas to Bulgarians through pipelines. But for poor Bulgaria, all this means much higher costs than those needed for direct Russian gas supplies. Sofia is therefore already signaling that it is not opposed to abandoning (of course, in consultation with Brussels) its uncompromising stance on the ruble scheme.
The transition to rubles in payments for Russian gas exports was initially not categorically approved by EU institutions and Old World governments, said Sergei Suverov, an investment strategist at Arikapital Management Company. However, after understanding the situation and assessing their countries' energy prospects, the position of most countries began to change. “Despite the loud statements of European politicians about the unacceptability of paying in rubles for Russian gas, the transition to a new financial scheme has proved quite possible,” says the expert, “firstly because it rules the European energy sphere. basically not political demagogues, but big commercial organizations that are interested in the ultimate profit. They clearly understand that the purchase of Russian pipeline raw materials is beneficial for both parties. “
“In terms of gas revenues, all attempts to complicate logistics will lead to higher prices for 'blue fuel'. That is why Russia can remain in a good plus, which cannot be said of European consumers, – says Alexei Fedorov, – Due to the démarche of five countries, spot gas prices will be higher on average. In addition, countries that have refused will have to pay extra for a more complicated supply route. So in 2022, the advantage in the Russian-European gas side will certainly remain on the Russian side. ”The expert states that the formula“ gas for rubles ”has become common practice. However, as the situation develops, in his opinion, the results of the special operation in Ukraine and also the speed of the Russian energy authorities in redirecting gas exports to Asia largely determine.
“Economic wars are usually permeated by politics and suffer from them. all market participants, ”says economist Andrei Loboda, director of external relations at BitRiver. In his opinion, the situation was exacerbated by the EU itself, when it began to ruthlessly distort the regulatory structure of the gas market in its favor. “The conversion of the payment mechanism into rubles is a grandiose success for Russia, which also helps strengthen the domestic currency and eliminates the dependence of the work of Russian exporters on Western sanctions.” Gas prices in Europe have skyrocketed and rubles are flowing into the Russian budget at lower supply volumes, concludes our partner.