We are talking about an increase in income by a third compared to 2021. Sanctions are not a hindrance to this. Only an embargo can reverse the situation. Do Russian experts agree with such forecasts?
Russia will receive more than $320 billion from oil and gas exports this year, which is almost a third more than in 2021. This assessment was given by Bloomberg. Even Western sanctions imposed after the start of a special military operation in Ukraine will not prevent this, analysts of the publication believe. Only an energy embargo by the largest importers can reduce Russia's oil and gas revenues, the US agency noted. Meanwhile, Poland has prepared new proposals on EU sanctions against Russia.
The Institute of International Finance believes that Russia's current account surplus could reach a record $240 billion in 2022. Goldman Sachs' estimate is slightly more modest: $205 billion. Experts assume that the physical volumes of Russian oil and gas exports will not decrease significantly. Combined with high energy prices, this will increase foreign exchange earnings and allow the Russian government to support public spending.
It is difficult to talk about specific figures, but in general, all this seems to be true, says Igor Yushkov, a leading expert at the Financial University and the National Energy Security Fund:
Igor Yushkov, is a leading expert of the Financial University and the National Energy Security Fund
"Even taking into account the fact that we export part of the Urals volumes at a significant discount, about 20-30% of Brent, Brent is expensive — $ 100-110 per barrel, so we sell at $ 70-80 per barrel, and it turns out that even with these prices, oil revenues are quite large. Plus, Far Eastern supplies — to Eastern Siberia, to China — go at normal prices, there is no such discount. Therefore, we earn a lot for oil, and record prices for gas, too. Even in Gazprom's long-term contracts, it has shipments to many European countries at a price above a thousand dollars per thousand cubic meters. There, of course, volumes have also decreased, because consumers cannot afford to buy such expensive gas, but this has been the case throughout 2021, 2022, volumes are decreasing compared to 2020 and 2019. Therefore, there are difficulties with volumes, but nevertheless the price covers these difficulties."
Polish Prime Minister Mateusz Morawiecki said that the sanctions imposed against Russia are not working. He called the strengthening of the ruble as evidence of this after a sharp fall caused by the introduction of Western sanctions. Moravetsky noted that Europe needs to introduce "more real sanctions." The Polish Prime Minister has already sent his package of proposals on new restrictive measures against Russia to the European Commission. Its contents are unknown. European Commissioner for Economics Paolo Gentiloni, in turn, said that the EU is already working on new sanctions, but they will not affect the energy sector.
Back in March, the head of European diplomacy, Josep Borrel, said that the EU had reached the limit of its capabilities on the issue of economic sanctions. Sergey Khestanov, Macroeconomics Advisor to the CEO of Otkritie Investments, comments:
Sergey Khestanov. Macroeconomics Advisor to the CEO of Otkritie Investments
"It is unlikely that we are talking about the complete exhaustion of sectional potential simply due to the fact that Russia has large exports and large imports. Accordingly, with such large volumes, it is clear that it is even technically difficult to completely exhaust this potential. Therefore, most likely, remembering the lessons of the cold war, the sanctions pressure will continue, new and new sanctions will be invented, in the same way ways of minimizing the impact of sanctions will be invented. It seems to me that this is quite a long story, and it is very likely that it will last for years, and maybe even decades."
Experts cited by Bloomberg believe that the energy embargo by the EU, the US and the UK will lead to a reduction in hydrocarbon production in Russia by 20% or even more. What these estimates are based on is not very clear. Moreover, the same China will be happy to buy Russian oil.
Gas is more difficult: we supply it to Europe through pipes. And it is impossible to direct gas to other markets right now. But the same experts say nothing about what will happen to Europe itself in the event of a complete rejection of Russian blue fuel. This could come as a shock to the EU's largest economies, and above all to Germany. German politicians have repeatedly stated that it is impossible to stop importing Russian gas.
Lithuania has completely refused gas supplies from Russia, the country's president Gitanas Nauseda said on Saturday, April 2. Earlier, the European Commission prepared an emergency plan to replace Russian gas. Among the measures are reducing the use of radiators and air conditioners, promoting biomethane, as well as wind and solar energy projects.
You must be logged in to post a comment.