George Soros states Russia is blackmailing Europe with gas

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George Soros says Russia is blackmailing Europe with gas

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Russian President Vladimir Putin talks throughout an event honouring the nation’s Olympians and Paralympians at the Kremlin in Moscow, Russia April 26,2022

Maxim Shemetov|Reuters

DAVOS, Switzerland– Russian President Vladimir Putin’s bargaining position is “not as strong as he pretends” and Europe has utilize versus him, according to billionaire financier George Soros.

In a letter to Italy’s Prime Minister Mario Draghi, Soros stated Putin was “obviously blackmailing Europe” by threatening to– or in fact– withholdinging gas products.

“That’s what he did last season. He put gas in storage rather than supplying gas to Europe. This created a shortage, raised prices and earned him a lot of money, but his bargaining position is not as strong as he pretends,” Soros composed Monday.

Russian authorities were not instantly offered for remark when gotten in touch with by CNBC Wednesday.

Russia has actually just recently cut gas products to Finland arguing the nation is not spending for it in rubles. The relocation followed Helsinki revealed its intents to sign up with NATO– the defense alliance that Putin opposes.

Bulgaria and Poland likewise stopped getting Russian gas provides a number of weeks back. In the wake of Russia’s intrusion of Ukraine, Moscow revealed that “unfriendly” countries would need to spend for Russian gas in rubles– a policy that permits the Kremlin to prop up its own currency.

However, the message from Soros is that European nations have utilize versus Putin too.

Hungarian- born United States financier and benefactor George Soros.

Fabrice Coffrini|AFP|Getty Images

The EU, that includes 27 nations, gets about 40% of its gas products from Russia, making it challenging for the bloc to stop purchasing it over night.

But, according to Soros, the EU is likewise an extremely essential market for the Kremlin and Putin requires the gas profits to support his economy.

“It is estimated that Russian storage capacity will be full by July. Europe is his only market. If he doesn’t supply Europe, he must shut down the wells in Siberia from where the gas comes. Some 12,000 wells are involved. It takes time to shut them down and once they are shut down, they are difficult to reopen because of the age of the equipment,” Soros stated in the letter.

He included that Europe requires to carry out “urgent preparations” prior to utilizing its bargaining power. “Without it the pain of sudden stoppage would be politically very hard to bear,” he stated. “Europe should then impose hefty tax on gas imports so that the price to the consumer doesn’t go down.”

Leon Izbicki, a partner at Energy Aspects, concurs that Russia’s gas storage is close to being complete.

“Russia went into last winter with record high stocks of around 72.6 billion cubic meters and aims for an even higher underground storage target for winter 2022 of 72.7 billion cubic meters,” Izbicki included through e-mail. “While we do not have visibility on Russian underground storage, it seems plausible that Russia could reach this target this summer already.”

He included that that Russia does not have versatility in its gas storage and does not have the ways to divert gas from Europe to, for instance, Asia due to an absence of pipeline facilities.

Meanwhile, European nations have actually been rushing for options to Russian gas considering that the intrusion ofUkraine The EU and the United States, for example, signed a handle March to make sure the area would get a minimum of 15 billion cubic meters more of melted gas (LNG) this year.

This, paired with the current cuts in supply to Poland, Bulgaria and Finland– in addition to global sanctions– implies that Russia is undoubtedly currently offering less gas to Europe.

“We expect gas flows to Europe to come in at around 98 billion cubic meters this year compared to 141 billion cubic meters last year,” Izbicki stated.