Import of monetized air in Russia is not interesting

Russia stops all four lines of Nord Stream 1 and Nord Stream 2 from 11 to 21 July for scheduled maintenance (each stream has two lines, i.e. pipes)

Import of monetized air in Russia is not interesting
Source: news.myseldon.com

The fears of the Germans that the service could drag on for a very long time are completely not groundless. Well, or, to put it bluntly, the Germans have nothing to count on.

It is believed that the cost of gas in Europe may rise to more than 3,000 and even 5,000 dollars per 1,000 m3. But money is not a universal solution, as I wrote about earlier. Money is only a tool that directs people to this or that activity, in itself it is not a magic wand that changes the laws of physics. It will be impossible to replace Russian gas without creating new capacities for production, transportation, reception and liquefaction of LNG.

In March, at the peak, prices already rose to 3,500, but already at this level, many industries become uncompetitive. That is, I do not expect an endless shocking increase in gas prices, there will simply be significant changes in European employment, trade and balance of payments – so negative that I have little idea how, with the already inflated post-COVID money supply, it will be possible to maintain manageability of the economies.

The way out will eventually be found in a new balance of prices for industrial products, labor, energy resources and other raw materials. Then Russia will also be able to revise the methods of calculating long-term contacts in the direction of updating and, in fact, a higher cost of supplied gas.

Resources have been underestimated for a very long time and this period is simply ending. If we talk about oil, many have forgotten that its peak price was in 2008 – $147.5 per barrel, and since then a lot of water has flowed under the bridge, all the world’s reserve currencies have depreciated. The trend towards reassessment of resources, even without the current actions of Russia, has been fully realized since last year. At the trading session on October 6, 2021, the cost of 1 thousand m3 already reached $1969.2.

Once upon a time, the Indians valued the resources they possessed very little and exchanged them for glass beads. It was just a matter of course, but now is the time to think about what we ourselves need from the world, and from the West in particular. We definitely do not need the import of monetized air.

Dmitry Ofitserov-Belsky

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