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Gazprom, Russian gas monopoly, has on Kremlin’s orders first threatened to, and then suspended gas supplies to Europe in an attempt to blackmail it to stop supp
by VincentEvans 4y ago
Gazprom, Russian gas monopoly, has on Kremlin’s orders first threatened to, and then suspended gas supplies to Europe in an attempt to blackmail it to stop supporting Ukraine under a threat of, as they put it, “freezing Europe”. In the process unilaterally breaking existing delivery contracts. There were no Western sanctions targeting Russian gas - it was entirely a political operation initiated by Russian government, “weaponizing energy supplies” as it often referred to, in the course of hybrid war.
Kremlin has miscalculated - Europe was able to largely avoid the intended crisis, while simultaneously Gazprom lost its largest market. The pivot from Russian supplies did come at a significant cost though.
Now that the Western sanctions are strangling Russian economy - if Gazprom wanted to come back to European market - they would be first greeted by billions of dollars of contract charges in arbitration courts.
It has long became obvious that Gazprom will likely attempt to use claims of force majeure to try to avoid financial penalties. And as it became customary for Russia - start preparing fertile ground in the courts of public opinion by planting various stories misdirecting the blame and muddying the waters.
- steponlego 4y agoWhy don't we just properly view the gas reductions for what they are - a form of sanctioning?
- VincentEvans 4y agoKremlin sanctioned themselves? Or are you presenting the suspension of gas supplies to Europe by Russia as a sort of “retaliatory sanctions”? That’s fine of course, it’s like North Korea cutting off themselves from the world and starving as a way to punish the world for interfering in its internal matters as they relate to nuclear weapons.
- steponlego 4y agoDeliberately misunderstanding what I said won't change my opinion or anybody else's.
- VincentEvans 4y agoDon’t pout but rather explain what you meant.
- PantaloonFlames 4y agoI will try to restate what I understood from VincentEvans' post. Gazprom unilaterally cut off gas supplies at the direction of the Kremlin, "weaponizing energy supplies" to Europe. At some point, if Gazprom wanted to come back to European market - they would be first greeted by billions of dollars of contract charges in arbitration courts. (and I guess the number of billions is probably in the 10's or more) Therefore, to avoid that fate, Gazprom or the Kremlin surreptitiously blew up Nordstream2 themselves, in order to be able, later, to claim in court that the could not have resumed gas deliveries if they wanted to. This would be an argument against the billions in contract charges. Basically, they incur the cost of blowing up (and later repairing, one presumes) their own pipeline in order to avoid the cost of the fines and legal sanctions for suspending gas delivery unilaterally. Summarized as: the Kremlin miscalculated in suspending gas delivery, and by blowing up the pipeline is trying to preserve some future access to the European market, after current hostilities cease.
- nawgz 4y agoYour comment seems to be deliberately misunderstanding who triggered the gas reduction, which is why others opinion of the comment is quite low
- brookst 4y agoI for one have no idea what you meant, and who you’re suggesting was sanctioning who in what manner for what purpose.
- kornhole 4y agoIf you know the way the US often imposes sanctions, it entails prohibition of both buying and selling from sanctioned parties. I work on many sales and procurement systems in the US that call services such as Amber Road or Descartes that scan the government provided lists of sanctioned parties before a PO or SO can be placed, delivered, or billed. Russia not selling its gas to an adversary is a simple sanction of this kind.
- andrewflnr 4y agoThey're saying the US did it, in coordination with their "other" sanctions, in agreement with the article and opposition to the commenter. I don't think this was a hard puzzle.
- VincentEvans 4y agoWasn’t clear to me, but if so - I have already more than covered my thoughts on the subject. Glad that’s settled.
- i_love_cookies 4y ago[flagged]
- chollida1 4y agoI would think because it was the Gazprom/Kremlin who cut of the gas supply.
- MilaM 4y ago> Now that the Western sanctions are strangling Russian economy - if Gazprom wanted to come back to European market - they would be first greeted by billions of dollars of contract charges in arbitration courts. This is not merely hypothetical. Uniper, one of Gazproms biggest customers in Europe, is already suing for $12 billion in damages. And that is only one of many former customers. https://www.reuters.com/business/energy/uniper-seeking-billions-euros-compensation-gazprom-2022-11-30/ https://www.reuters.com/business/energy/uniper-seeking-billi...
- VincentEvans 4y agoIt’s probably worth adding here that according to a quick google search - the cost of Nordstream2 project is $11B. So one might imagine that the costs of potential repairs are negligible in comparison.
- cpwright 4y agoSalt water entering the pipeline can damage more than just the single length of pipe that has the hole in it, so fixing it is can be uneconomical.
- Reason077 4y agoThe repair costs have been estimated (by Nord Stream AG) to start at around $500 million. No word yet on whether they actually plan to repair it.
- blub 4y agoThe EU politicians may have expected to declare an unprecedented economic war on Russia while the latter dutifully continued to fulfill its gas contracts to the EU. Seems plausible given the geopolitical mastery the EU posesses. But does anyone else actually believe that? The other contract party trying to destroy your economy is a pretty good reason to terminate a contract. Failing that Russia could keep inventing problems with turbines. Or sabotage the pipelines somewhere one can more easily repair them. I do remember how several media organizations and politicians from the EU jumped at accusing Russia with zero proof. Once the media mania subsided several US newspaper reported that indeed there was no proof whatsoever and they had jumped to conclusions. The later conspicuous silence from EU governments on a potential culprit, lack of evidence pointing at Russia and several statements from acting US politicians threatening NS and gloating over its demise plus a former Polish politician thanking the US certainly don’t do anything to clear the US from suspicion. Still, this remains all circumstantial evidence. But not even this kind of circumstantial evidence exists pointing to Russia as culprit. Just far-fetched theories about them wanting to dodge contract penalties or doing it to show that they can. This is as credible as them doing it as an experiment to see what happens when you blow up a pipeline, really.
- VincentEvans 4y ago“Unprecedented economic war” that was only preceded by an “unprecedented actual war” war. And stoking and supplying separatists, along with mercenaries in Ukrainian territories before that. And downing a passenger jet before that. And annexing Crimea before that. And invading and occupying a quarter of Georgia before that. And doing the same in Moldova before that.
- blub 4y agoGiven that we were discussing reasons for: * Russia breaking gas delivery contracts with several EU countries and you’ve replied with: * a non sequitur enumerating a series of bellicose actions Russia took in relation to non-EU countries spanning years in the past We can consider your contract argument refuted.
- throwaway894345 4y ago> Kremlin has miscalculated Europe has also had a very mild winter, so luck played a nontrivial role. > Now that the Western sanctions are strangling Russian economy I'm very curious about how Western sanctions are affecting the Russian economy (I understand that you're speaking narrowly to Gazprom, but I'm asking about the Russian economy more broadly). My understanding is that Putin has spent the better part of the last decade immunizing the Russian economy from Western sanctions, and that this project has largely succeeded--that Russian oil sales are still making plenty of money to finance his invasion, etc. Can anyone elucidate?
- VincentEvans 4y agoRussian attempts to withstand the economic pressure of sanctions have been successful insofar as to prevent a collapse, but the pressure is crushing on all aspects of the economy, as well as any hopes for Russia for economic and industrial development. Brain drain, loss of foreign investment, technology imports, diminishing consumer activity, falling real estate markets - are just some of the headwinds that are in effect outside the energy sanctions. The budget revenue deficit for just the January of this year exceeds the deficit for the entirety of 2022. Russia has reserves that it can employ for the time being to mitigate some of the damage, but they are not bottomless. If the pace of losses continues in a similar manner - most of the reserves will be exhausted by years end. After that - one might expect the usual tools to be employed - cutting budgets to pay for civil workers (everyone other than security), pensions etc, attempts to raise money from already struggling businesses via wartime taxes, issuance of wartime bonds to population to borrow cash, and if all fails - start printing money to plug the budgetary shortfalls, and the resulting inflation.
- chii 4y ago> Brain drain, loss of foreign investment, technology imports, diminishing consumer activity, falling real estate markets I dont think the kremlin cares for any of these, except may be with brain drain (which they can easily fix by preventing movement of people). As long as russia produces enough food for the population, a subsistence living is "good enough" in the eyes of the kremlin, and thus these sanctions doesn't hurt as much as the west had hoped.
- joe_the_user 4y agoRussia is a brutal dictatorship engaging in a war of aggression against the Ukraine and using natural gas as weapon in it's war. But is that a reason to not to address or even mention the topic of the post, the destruction of the Nord Stream pipeline? I mean, are implicitly saying that covert act was justified? If people believe that, they should say it. One of the worst effects of war is an attitude of "not only is everything our side does automatically justified, we're going to stomp on any investigation of what our side does".
- T3RMINATED 4y ago[dead]
- VincentEvans 4y agoYou seem to be pretty convinced that US is behind it, where I am not so much. I wouldn’t presume to know if destruction of the pipeline is justified if you look at it from Russian perspective, if they are responsible, but I can volunteer a few motives why they might be: - an attempt to introduce a force majeure factor into any future contract disagreements - an attempt at escalating the seriousness of threats, signalling “we aren’t backing down” - an attempt to drive a wedge between allies by implicating a sabotage behind ones backs. US vs Germany etc. … or a little of all of the above. One of the key strategies employed by Russia in the conflict - is a periodic display of belligerence bordering on unhingement. I think Russia being behind it fits the MO.
- TEP_Kim_Il_Sung 4y agoI think the only thing we can be sure of is that this was perpetrated by government.
- hef19898 4y agoThe Baltic Sea is quite shallow, so not even necessarily a government. Someone did it so.
- trwhanh 4y agoI question this theory. Russia had already throttled NS 1 and was playing games with the turbine certification. I'm not so sure that they would have had to pay damages. It is true that they were pressuring Germany to certify NS 2 (one explanation is that NS 1 had long term contracts whereas NS 2 would have been higher spot prices). But the danger of NS 2 certification would also support the U.S. involvement theory. To all others who focus on NS and Germany: There are a multitude of Russian pipelines through Poland and Ukraine that are still operating. Ukraine collects transit fees for Russian gas as we speak. So the theory that the attempt was to destroy specifically German/Russian relations, which had been a stated goal of U.S. foreign policy for decades, is pretty solid. I don't expect much from the Swedish investigation. Another such investigation was the sinking of the MS Estonia. Figures like Carl Bildt (who is now a war hawk) went on to the RAND corporation. Sweden will do what the U.S. prescribes.
- jeltz 4y ago> Another such investigation was the sinking of the MS Estonia Stop believing conspiracy theories. The investigation into the sinking was well executed and most likely correct. Estonia was also never covered, they started the work and then aborted it.
- klrtwm 4y agoStop accusing people of believing conspiracy theories (though it apparently gains upvotes here). It is the Swedish government who re-investigates: https://sverigesradio.se/artikel/7630268 https://sverigesradio.se/artikel/7630268
- Reason077 4y agoIt doesn't make sense that Russia would blow up their own pipeline. They can't blackmail Europe with gas if there's no pipeline to supply the gas. And force majeure? That's pretty far-fetched. Why would Russia care about financial penalties? This is the country that effectively stole over 400 airliners by refusing to return them when the leases were terminated.
- ceejayoz 4y ago> It doesn't make sense that Russia would blow up their own pipeline. I disagree, but assuming this were true, that'd mean doing so would offer an opportunity to sow discord amongst the allied nations. Like cops telling a suspect "your buddy confessed already".
- VincentEvans 4y agoI explained why Russia would care. Because due to financial need Russia may want to come back to European energy markets where they are facing billions of dollars of contract penalties. They can stop shipments unilaterally, but they can’t do the same if they want to resume shipments.
- graton 4y agoOne pipeline was not blown up and can carry 27.5 billion cubic meters per year. So it is still technically possible to send gas through that pipeline. https://www.reuters.com/business/energy/single-line-nord-stream-2-can-still-export-gas-analysts-say-2022-09-28/ https://www.reuters.com/business/energy/single-line-nord-str...
- philistine 4y agoThe clearest reasoning is this: the pipeline was closed and unused. A potential replacement of Putin could have gotten Western support by promising to quickly reopen the pipeline. If the pipeline is gone, no potential replacement can use the pipeline to gather Western support. There doesn’t even need to be a physical person that exists right now in Russia to oppose Putin. Just the possibility of it might have been enough for Putin to blow his own goddamn jewel in the Baltic.
- mhermher 4y agoWhat does this have to do with the submission?
- VincentEvans 4y agoIt casts doubt on the unverified claims that US is responsible for the sabotage of the gas pipeline and raises the possibility that it’s a planted piece by Russian propaganda ops.