RTFri, 01 Apr 2022 09:31 UTC
© BrookingsRussian President Vladimir Putin
Russia will have record revenues from natural gas sales this year due to high prices in the spot markets, Janis Kluge, a Eurasia-focused researcher at the German Science and Politics Foundation, told
ntv.de news outlet:
"Almost half of the Russian budget is based on transactions with oil and gas. The state earns enormously from production taxes and export duties. It receives the income in rubles, and the amount is determined by two factors: firstly, by energy prices on the world market and, secondly, by the exchange rate of the ruble."
According to him,
revenue from gas will soar this year, as many of Russia's gas contracts are adjusting to the rising spot prices. Kluge predicted the cost will increase significantly within the next several months:
"The gas price on the spot markets has quintupled within the past year. That means Gazprom will have record revenues."
The situation is similar with oil, Kluge says, which profits from the ruble's sanctions-induced drop.
"Russia planned the national budget with a dollar-ruble exchange rate of 72, but now the ruble is around 85, much weaker, but with a view to energy exports this is an advantage. If we multiply the oil price by the ruble exchange rate, it shows that Moscow expected revenues of around 4,500 rubles per barrel of oil, but is getting much more, around 7,000 rubles."
According to him,
the profit from energy sales will be enough to cover the impact of Ukraine-related sanctions on the Russian economy, among other things, by halting inflation.Kluge also believes
the costs of the operation in Ukraine are not very high, and economic measures, except for a complete embargo, will hardly "stop the tanks." And seeing that the Russian Central Bank has been inventive in introducing counter-measures to keep the economy afloat,
Kluge predicts that Russia will survive the sanctions and even have a budget surplus this year.
Comment: Austria's economy finds it is impossible to ban
Russian gas:
Austria is unable to stop buying Russian natural gas this year, the head of energy giant OMV, Alfred Stern, said in response to calls for European states to place an embargo on Russian supplies. In an interview with Die Presse, he stated:
"Embargo on Russian gas is impossible if we are not ready to accept the dire consequences. Some countries could do it, but for Austria it is not possible this year... The phase-out of Russian gas comes at a price."
Stern explained that unlike some EU countries, Austria "is in a difficult position" when it comes to alternative energy sources, having "no access to the sea, no access to liquefied petroleum gas."
Stern is not alone in his views regarding Austria's dependence on Russian energy. Austrian Chancellor Karl Nehammer said earlier this week that he does not support any restrictions on the supply of oil and gas from Russia to Europe.
"From us there should be a clear rejection of any ideas about stopping the import of Russian gas or Russian oil."
Currently, gas storage facilities in Austria are only 13% full, media reports, citing industry sources.
Hungary agrees:
Hungarian Prime Minister Viktor Orban said, on Friday, that there are countries which will not be able to substitute Russian gas with the more expensive American alternative.
Speaking to local radio station Kossuth, ahead of this weekend's parliamentary election, Orban said Russian gas is his country's only option, as Hungary is landlocked and won't be able to directly receive liquified gas from the US.
Orban reiterated that Hungary condemns Russia's attack against Ukraine, and that he understands the efforts of Ukrainian President Volodymyr Zelensky, as his country is in trouble and he is looking out for Ukrainian interests, but stated that
"Hungary can't help the Ukrainian people by destroying itself. This war is not our war, we can't win here, but we can lose everything. The question is will we have an economy left by the end of it or not. It is impossible for Hungary to turn off cheap Russian gas and buy expensive American energy instead."
It is not viable for Europe to count on the transportation of sufficient volumes of liquified gas from the US across the ocean, and that there is no alternative to Russian supplies in the near future, for Hungary in particular.
"It's not about putting on a sweater at night, or turning down the heating a little or paying a bit more for gas, it's about the fact that if there is no energy coming from Russia, Hungary will be left with no energy at all."
The prime minister came under fire from Ukraine and its supporters for refusing to take a definitive stance against Russia. President Zelensky called on the Hungarian leader to quit "sitting on the fence" and choose a side in the conflict between Kiev and Moscow.
Unlike other EU capitals, Budapest has so far refused to either send weapons to Ukraine, or allow other countries to move shipments through its territory.
Earlier, Orban said that Hungary is intent on looking out for its own interests first and will maintain a "Hungarian point of view," but emphasized that "it must be made clear to the Russians that it is not worth pursuing this war," warning at the same time that Europe should avoid hurting itself "more than the Russians."
Efforts to crush the Russian economy are backfiring to the detriment of Western interests, financial manipulations and global hegemony.
Comment: Austria's economy finds it is impossible to ban Russian gas: Hungary agrees: Efforts to crush the Russian economy are backfiring to the detriment of Western interests, financial manipulations and global hegemony.