Russia’s threat to cut off gas supplies to Europe will affect Germany largely, including Russia’s fuel in a productive equation resulting in the world’s most competitive industry.
The European Union (EU) depends on more than 40% of its demand on Russia’s gas supplies, and 35% on oil shipments. In the case of Germany, leader of the Euro Zone, these percentages are 60% of gas supply and 40% of oil supply.
Gazprom is the largest gas producer in Russia and the world; and it has a monopoly on the gas pipelines that carry Russian gas to Europe. The gas it is a commodity with a non-transferable particularityand it is that its conversion into an economic commodity depends on the infrastructure provided by gas pipelines, and connects the fields of production to consumer markets.
Gazprom will produce 540 billion cubic meters of gas in 2021, which is more than the combined BP (British Petroleum), Shell, Chevron (formerly Standard Oil), ExxonMobil, and Aramco (of Saudi Arabia).
In all that, 168,000 million m3 were exported to Europewhile 331,000 million were consumed in Russia.
The central strategic fact of Russia’s gas production is not its extraordinary size, but that fact there is no possible replacement in the worlddue to the fact that other large companies are at the maximum capacity of their production, at the same time they are fully committed to long -term contracts.
Europe’s reliance on Russia’s gas is structural; and it can be argued, for example, that the German manufacturing industry, which is third in the world and first in competitiveness/productivity, forming a single global accumulation and production system with Russia’s energy.
That is why the Russian gas cutoff in Poland and Bulgaria was ordered two weeks ago because of their refusal to pay the provision in rubles, and not in dollars or euros, as established by President Vladimir Putin in March, has immediately led to a 25% increase in the cost of energy in Europe, bringing it to € 106 (US $ 120) per megawatt/hour, indicating that it has increased 7 times over the past year; and that this has already happened in the rhythm of the sanctions imposed on Russia by the US and Europe.
It should be added that by the end of this year the long-term contracts for the supply of Russian gas to the European continent will end, and they will no longer be renewed.
What does this mean Russia’s gas supply to the continent will be reduced by 25%, or more, by December 2022which will cause, as an inevitable counterpart, the closure of at least 15% of manufacturing companies, due to the combined impact of energy shortages and loss of competitiveness in the world market.
Bloomberg reported that the 10 major energy import companies of the Federal Republic have complied with Vladimir Putin’s request for payment in rubles; and among them are Uniper from Dusseldorf and OMB from Bavaria/Austria, while ENI, the big Italian state company, will do the same.
This happens when the War in Ukraine ceases to be a conflict between Russia and its neighbor, and becomes a protracted world war that mixes the US and NATO against Russia.
This war, in which the US is the main protagonist, has been defined by the Chief of Staff, General Mark Milley, as a conflict “that will last for many years”.
This attribute is accompanied by a re -definition of American goalswhich no longer consists of helping Ukraine in the face of Russia’s aggression, but rather “dramatically reducing Russia’s military power in a certain way”, according to Defense Secretary Lloyd Austin.
A third feature should be added to this change in US policy, that is is the removal of the political system led by Vladimir Putinas demanded with remarkable clarity by President Joe Biden in his speech in Warsaw.
The US commitment to this new world war is full and complete, and includes the decision to “fully mobilize its industry” which is the first and most advanced in the world; and that was the instrument that allowed him to dominate the Third Reich and the Japanese Empire in a heavy offensive that lasted 4 years.
There is only one anomalous truth in this historical decision to defeat Russia and destroy its military power, and that is what the US Commander in Chief demonstrated in this Third World War – President Joe Biden. extraordinary political weaknesswith less than 35% support in public opinion, and when 70% of Americans are convinced that the direction of the country is wrong.
Its roots are as follows: inflation in March rose to 8.5% annually, the highest in 40 years, and this level became the basis of inflation in the US, heralding the coming of a deep recession. .
Therefore, all the polls indicate that Democrats will lose control of both houses of Congress this year, by a difference that could be overwhelming.
Optimism/pessimism is a foreign category in economic, political, or strategic analysis, but good luck in the Ukraine War – which is Machiavelli’s “virtue” – it will be played this year mainly in the USA and not on the Ukrainian field.
Source: Clarin
