Russian President Vladimir Putin had an important videoconference with several ministers, and energy and regional leaders, Oct. 6, which is remarkable from many standpoints. Putin gave a lesson in economics to the West, mincing no words about the stupidity of EU countries in shifting to renewables and to the spot market instead of long-term contracts. He also gave figures proving that Russia never reduced gas supply to Europe, except when, in 2020, the demand was lower because of the lockdowns.
“The global energy market does not tolerate hectic moves and vagaries. Investment plans in this area are long-term. Therefore, any abrupt and rash actions may lead, and, judging by the current market situation, are already leading to serious imbalances like those we are seeing in the European market that has been affected this year by several unfavourable factors all at once,” Putin said.
“The practices of our European partners [are to blame]. These practices have reaffirmed that, properly speaking, they have made mistakes. We were talking with the former European Commission; all of its activities were aimed at curtailing the so-called long-term contracts and at transitioning to gas exchange trading.”
“It turned out – and today this is absolutely obvious – that this policy is erroneous, erroneous for the reason that it fails to take into account the gas market specifics dependent on a large number of uncertainty factors. Consumers, including, for example, fertiliser producers, are losing all price benchmarks. All of this is leading to failures and, as I said, imbalances.”
In the discussion, Putin endorsed Deputy Prime Minister Alexander Novak’s proposal to increase sales on the spot market to cool down international prices; however, such sales should be made on the St. Petersburg market, where speculation is better controlled.
Putin also exposed the British for having influenced European decisions. “The proposal to switch to an exchange trading system for natural gas came from the European Commission experts under the previous mandate, mostly from British experts. Where are those British experts with their proposals now? We know where they are, but consumers in continental Europe have been left to suffer from these initiatives.’’
Germany is now burning, in proportion, more coal than Russia. “How can they fight for carbon neutrality, if the share of coal in the energy balance in Europe, and in this case we are talking about Germany, is twice as high as in Russia? Well, it turns out they can. This is what they — I mean the Europeans — are doing and trying to do at someone else’s expense. In this case, they are trying to do this at our expense, at the expense of the Russian Federation.”
The Russian President also instructed all participants to monitor compliance with trade agreements, including with Ukraine.
Remarkably, Deputy PM Alexander Novak called for an investigation into the role of financial speculation. Factors such as failure of renewables, Green Transition, increased demand and lower supply are all factors that “would not have had such a major influence on the growth of prices without the current market speculation and general hysteria.
“These are indeed serious factors. However, I would also say that market speculation, which is driving the prices up, is very strong as well. This most likely calls for an investigation into the activities of stock market speculators, because objectively the current price does not reflect the current situation.”
Transcription Kremlin site:
