The US Congress approved a bill that hinders the supply of Russian oil and gas to Eastern and Central Europe.
“To Save Europe From Russian Intimidation”
The bill, the full text of which you can find on the Congress website, has a long title, and Russia is not mentioned in the title. Nevertheless, the document is entirely directed against Russia and, most importantly, does not hide the commercial focus of anti-Russian sanctions at all.
The third article of the project states its declarative goal – to “help” the countries of Central and Eastern Europe to reduce their dependence on the energy resources of countries that use energy for excessive political influence, such as the Russian Federation, which used natural gas to coerce, intimidate and influence others. country. The following is a list of 21 countries that should be saved from Russian intimidation.
Further, the law proposes … to promote the energy security of the allies and partners of the United States by encouraging the development of affordable, transparent and competitive energy markets – and, of course, to promote the export of energy resources, technology and the experience of the United States to world markets.
“Removing any obstacles”
Actually, everything is clear. But let’s see now what methods respected congressmen intend to use.
The United States intends to:
support projects related to the construction or modernization of the energy infrastructure (that is, to take control of the energy sector in the region);
to diversify energy sources and routes of supplies to the countries of Central and Eastern Europe (that is, to save them from “Russian domination”);increase competition in energy markets (the same).
Next are the signs of objects to which the US will provide priority assistance – in fact, it lists all possible energy, except oil, with an emphasis on the import of liquefied natural gas, the main energy carrier that America can offer Europe.
And then – the ways of this support. Characteristically, the first place is not financial or scientific-technical, but diplomatic and political support through the Secretary of State, “to remove any obstacles” to the development of projects.
The approved budget for “eliminating any obstacles” is one billion dollars of “debt financing and insurance” for five years, but there is no doubt that if things go, the budget will increase. Plus five million annually on organizational work.
How much oil and gas does Russia supply to Europe
We know that in 2018, Russia supplied about 120 million tons of oil to Europe (all, and not just “protected” by the new project) at an average actual price of about $ 500 per ton. In addition, Russia sold to Europeans in 2018 a little over 200 billion cubic meters of gas at an average price of almost $ 250 per thousand cubic meters. It is easy to calculate that the total amount of revenue is 60 billion dollars for oil and 50 billion for gas. At the same time, oil supplies are decreasing, gas supplies are growing.
110 billion dollars is a serious thing, it is 7% of Russian GDP. On the supply of gas and oil to Europe, the state and business earn more than 40 billion dollars a year.
Obviously, the Russians cannot give such money without a fight. But is there a large proportion of countries mentioned in the new law? Of course not! The Netherlands and Germany alone buy more than the countries from the list, while the Western Europeans have politely rejected the US with their energy initiatives. The more compliant Central and Eastern Europe is less than 20% of the values mentioned above, the main buyer is Poland, and most of the countries represent negligible points on the Gazprom and Transneft maps. Thus, a one-time cessation of deliveries to 21 countries would lead to a loss of profits of approximately $ 8 billion annually and are not critical for the Russian economy.
Unfortunately for the Congress, a billion and not nearly enough for the reconstruction of Eastern European refineries, adapted to the sulfurous Russian oil. Moreover, even in the case of a magic alteration of them for light varieties, no one bothers Russia to offer ready-made oil products instead of oil — gasoline, diesel fuel, oils, and so on. The Russians are quite capable, with a similar quality, to provide a lower price than the monarchies of the Gulf and especially the USA – at least at the expense of well-established logistics. The fact that Russia and the European Union are the nearest neighbors is very annoying to Washington, and from the document adopted by Congress, it splashes out the desire to change something in geography.