Russia supplies about 40 percent of the EU’s gas, and Western sanctions over what Moscow calls a “special military operation” in Ukraine have hurt its energy exports by complicating the financing and logistics of existing agreements. As the EU debates whether to impose sanctions on Russian gas and oil and Member States seek supplies elsewhere, the Kremlin is forging closer ties with China, the world’s leading energy consumer, and other Asian countries. “The so-called partners from unfriendly countries admit that they will not be able to cope without Russian energy resources, including gas, for example,” Putin told a televised government meeting. “There is no logical replacement [for Russian gas] in Europe now. “ Mr Putin also said that Europe was talking about cutting off energy supplies from Russia, raising prices and destabilizing the market. He said Russia, which accounts for about 10 percent of world oil production and about one-fifth of gas, would need new infrastructure to boost energy supplies to Asia. Ordered the government to present a plan by 1 June, including “expanding transport infrastructure to African and Latin American countries” [and the] Asia Pacific. “ He also sought clarity on the possibility of including two pipelines – the Power of Siberia to China and the eastern Sakhalin-Khabarovsk-Vladivostok pipeline in Russia’s unified gas supply system. Connecting these routes to the wider network could, in theory, allow Russia to change gas flows from Europe to Asia and vice versa. Russia began supplying gas to China with a pipeline in late 2019, and in February agreed on a 30-year contract through a new pipeline, which has not yet been built, with plans to settle sales in euros. Mr Putin also said that the role of national currencies in export deals should be increased, in the midst of Russia’s plans to switch to rubles in payments for its gas supplies, mainly to Europe. Russia has seen a sharp drop in oil production, its main source of revenue, amid difficulties paying for trade and ships. Major global traders plan to cut crude and fuel purchases from state-controlled Russian oil companies as early as May 15, sources said, to avoid EU sanctions on Russia. Mr Putin said the industry’s biggest problems were related to disruptions in energy supply. Be smart with your money. Receive the latest investment information delivered directly to your inbox three times a week with the Globe Investor newsletter. Register today.
