Gas prices are at historic highs and Europeans are preparing for a cold winter. Does Russia benefit from the gas war with Europe or lose a proven solvent customer?
At first glance, Europe is losing in the gas war. Inflation in July in the eurozone reached a record 8.9%, and in the Baltic States – Estonia, Latvia, and Lithuania – exceeded 20%. The reason is precise because of rising energy prices.
But Russia also loses from the gas war: it loses part of its budget revenues and is likely to lose a reliable buyer of gas in the future.
The total export of pipeline gas in 2021 brought Russia $55 billion – and most of this amount was received from European countries. If Russia stops selling gas to Europe, the budget will lose about $40 billion a year.
Experts interviewed by the BBC say that European buyers for Russia will be difficult to replace. And Europe will step by step abandon Russian gas.
The key alternative for Russia now is China. However, it is unlikely to be able to compensate for the drop-out supply from EU countries. China simply doesn’t need as much gas as the EU used to buy, experts say.
Apart from China, Russia will be left with only Turkey and the southern European direction.
Is it possible to replace the EU countries and won’t Russia be dependent on the few countries that are willing to pay for Russian gas?