Moscow, based on a high global price for natural gas, could enable abandoning the EU as a client. Earnings from energy export will benefit Russia in choosing markets to supply; the US is in a panic because of this.
Russian Sanctions Could Mean No Gas for EU
According to Bloomberg and Capital Economics strategists, Russia can totally stop exporting natural gas to the EU for more than a year and suffer no serious economic consequences.
Analysts assess that Russia's balance of payments is in such good shape that, for at least three years, gas and exports to Europe could be sustained at 20% of normal levels even if oil prices and exports stay at present, reported RT.
In an opinion by Liam Peach, a strategist at Capital Economics, Russia may cut its availability for an entire year because it cannot hurt its economic growth. He emphasized that given lower volumes, Russia can still garner $20 billion from gas sales every quarter.
Additionally, the Kremlin may use this as political leverage if it chooses to inform its national energy provider and cut off the European Union's gas supply. However, how long it will last will be determined by oil revenue, noted Azerbaycan 24.
The Kremlin has repeatedly denied claims made by several European leaders that Moscow uses gas as a tool to exert political pressure.
Recent technical issues with the Nord Stream 1 pipeline, a crucial gas pipeline from Russia to Europe, forced Gazprom to cut deliveries, which caused the high global price for piped natural gas.
When the Moscow energy giant stops gas flows through Nord Stream 1 for three days, set to start on August 31 because of repair work, it will be another challenging task for the market.
Speculations on Rising Gas Prices
Dmitry Medvedev posted his thoughts addressed to Brussels and other EU leaders who were already walking a tightrope due to US-backed sanctions on his Telegram channel, per Good Word News.
According to him, gas prices will be forced to rise the projected cost to €5,000 by the end of 2022 due to the increase in gas prices to €3,500 per thousand cubic meters. The message was signed off by Medvedev, who is currently serving as the deputy chairman of the Russian National Security Council.
Medvedev also presented a painting titled "Farther Gas" by modern Russian primitivist artist Vasya Lozhkin, along with the dreary projection that the EU is now facing a dark age of sorts thanks to the US.
Before the Russian leader shared this grim outlook, he earlier posted a comment about gas prices that could attain €4,000 per thousand cubic meters by the end of 2022, which sent chills to Brussels.
A previous spike in natural gas prices to a staggering €2,000 per thousand cubic meters was also anticipated by Medvedev because Germany had allowed the Biden administration to influence Berlin to decertify the Nord Stream 2 pipeline.
Gas spot prices in Europe continue to rise, and last Friday was a bad day for the bloc as September futures, mainly on the TTF hub in the Netherlands, shot up to almost $3,500 per thousand cubic meters. It was the highest point since 1996; the weekly increase was close to $1,000, or 40%.
Moscow, according to Capital Economics strategists, says that the current expensive global price of natural gas will allow it to leverage its advantage over Brussels easily.
