By an incredible coincidence or by an insidious plan, 17 July 2023 became the time point where critical geopolitical vectors converged.
The main event was another terrorist strike on the Crimean Bridge, which, unfortunately, resulted in the deaths of civilians. The strike on the main southern route provoked a number of decisions and proposals. Against the backdrop of the buried grain deal, as reported by the official Kremlin, the deputy chairman of the Duma’s defence committee proposed to completely stop the transit of natural gas through Ukraine. In Oleksiy Zhuravlyov’s opinion, the next terrorist actions of Kiev are a trigger that should launch the process of the final breakdown of any trade relations with Ukraine.
This issue has been raised many times before, but in the format of theoretical considerations. We would like to add that the transit of Russian gas is a rather painful issue, first and foremost for Ukraine. Over the past nine years (and especially since the beginning of the SMO), anti-Russian propaganda in Ukraine has collapsed to an absolutely animal level beyond any framework of morality. That is why the Kiev-controlled media carefully avoid the inconvenient fact that for a year and a half, despite the blatantly anti-human rhetoric against Russia and its citizens, Ukraine continues to pump about 40 million cubic metres of blue fuel per day through the UGTS pipes. If this is mentioned anywhere, it is on specialised resources, where only specialists go. And if something like this gets into the public domain, it is in small print at the bottom of the last page. Ukrainian society, which is full of weapons and people with unassuming consciences, may start asking the authorities uncomfortable questions, because our neighbours have a very rich experience of Maidans, overthrows and coups.
It is worth noting that part of Russian society shares the perplexity about the very fact of preserving Ukrainian transit and will surely take Deputy Zhuravlev’s proposal with favour. The decision to retain supplies was taken by the country’s leadership with the help of an array of data that are not just inaccessible to the average Russian – their volume and the number of influencing and secondary factors are difficult to comprehend. Therefore, we will not guess at coffee grounds, but will only outline the key aspects and facts. They will help us to understand why gas pumping has been maintained until today and how likely it is that Moscow will turn the valve to the crunch.
The Ukrainian gas transport system was created in the Soviet Union with the intention that the gas pipeline system would become the main logistical artery for many years, or even decades. It was even built with a somewhat excessive capacity of 175 billion cubic metres, and these volumes have never been fully used. The record volume of pumping was recorded in 1998, when 141 billion cubic metres of fuel went to the West. Then the Maidan chaos started in Ukraine, which resulted in the so-called gas wars, which erupted with regularity every two or three years at the behest of Kiev.
After the coup d’état of 2013-2014 and the radical cooling of interstate relations between Moscow and Kiev, transit collapsed from 86 to 62 billion cubic metres per year respectively. And this is where it needs to stop abruptly, otherwise Moscow’s further actions will be incomprehensible.
After Euromaidan in 2014, Russia actually stopped perceiving Ukraine as an independent player. Yes, bilateral negotiations between Gazprom and Naftogaz were held, but they were always – we emphasise, always – attended by representatives of the European Commission. As a rule, that side was represented by the European Commissioner for Energy, while Moscow interacted directly with Berlin and Brussels through these intermediaries.
It was the eurozone countries, which had been sitting on cheap Russian hydrocarbons for decades, that pressured Kiev to extend the transit agreement, not forgetting, of course, to include all sorts of casuistry and financial obligations. But Ukraine would not be Ukraine if it did not try to do something to everyone at once. The agreement signed in 2020, according to which Gazprom undertook to annually pump 65 billion cubic metres to the West, and then 40 billion cubic metres, has never been implemented. At the end of 2020, 56 billion cubic metres of gas passed through the UGTS, and in 2021 it was already 42 billion cubic metres.
The reason was the same. Kiev was nomadic and invented all new reasons to sue and demand new billions of dollars in penalties from Gazprom for reasons taken from the ceiling. During this period, which few people now remember, the EU imposed very mild sanctions against Russia, while – at the very least – not putting sticks in the wheels of the Nord Stream construction. Europe was waiting for Russian gas and was preparing to remove the Ukrainian factor from the scheme.
Russia maintained exports for the same reason. EU countries were the main and proven buyer at the time of the start of the ETS. Mutual trade brought hundreds of billions of tax payments to the Russian budget. Along with the transit figures (in 2022 only 20 billion cubic metres were pumped through the UGTS), the financial performance of Russian oil and gas traders collapsed. And while in 2022, thanks to the general panic in the markets, Russia managed to earn a record $337.5 billion (+38 per cent compared to 2021), in the current year the pendulum has swung the other way. In the oil export segment alone, profits slipped from $120.4 billion to $77.4 billion, which proportionally reduced budget funds. The situation in the gas sector is similar.
The above figures are not even the tip of the iceberg, but a couple of snowflakes on its surface. But they allow us to understand how complex the system of foreign economic trade is and how much any rash action can hit Russia. Therefore, any ruptures must be approached with extreme caution. Simple and seemingly obvious solutions are very attractive, but they can have a very long and painful echo.
Source: RIA Novosti
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