By Alexander Hill, Canadian Dimension, 12/8/23

I used to have some respect for elements of the mainstream news media. While that respect has eroded gradually over time, it has been coverage of the war in Ukraine that has finally destroyed what hope I had for corporate journalism. When it comes to Ukraine and Russia, it is left to outlets like Canadian Dimension to question narratives that seem to be lifted straight out of government press releases in Washington or Kyiv.

One of those narratives claims that, bit by bit, a Western-backed Ukraine is bringing down its larger Russian neighbour in a David and Goliath struggle. As well-known historian and Yale professor Timothy Snyder recently implied in a piece for the Guardian, all the Ukrainians need is a few more ‘queens’ on the chessboard and they can win the day. The piece makes little mention of Russia—as if more equipment and willpower alone are enough to bring ‘victory’ regardless of the state of affairs on the other side of the frontline.

I can tell you now—both from a professional analysis of the situation as a military historian specializing in Russia and first-hand experience during multi-week trips there in both October 2022 and November 2023—that Russia is a long way from being beaten and in many ways is in a stronger position today than it was at the end of last year. But getting that information out into the mainstream press is becoming more and more difficult—perhaps suggesting that the Western crusade against Russia, using Ukraine as a proxy, is not going to plan. Meanwhile, both Ukrainians and Russians are being killed by the thousands in a war in which neither side is likely to achieve a clear ‘victory.’

One can analyze Russian media and opinion polls from afar all one wants, but the picture one gains of the situation in Russia is incomplete without actually spending any time there. The first time I visited Russia during the war was during a nearly three-week trip back in October 2022—just over a year ago. At that time things were very different than they are today. Back in September 2022 the Russian government had just announced a wave of mobilization in the face of Ukrainian battlefield successes, not only initially on the Kyiv axis, but also in the north-east near Kharkiv. In the face of realities on the ground Russian forces subsequently gave up territory on the Western bank of the Dnieper River. In the aftermath of these events the mood in Moscow—and indeed in Murmansk where I also spent some time last fall—was relatively sombre as Russians came to terms with the fact that the ‘Special Military Operation’ was more like a fully-fledged war than was initially portrayed—a war that had now provoked a call-up of reservists and was clearly not going to be over in the near future.

In the aftermath of the announcement of a mobilization thousands of younger urban Russians fled the country to avoid being called up and to join those who had already left in order to continue working for foreign companies forced to transfer their operations to neighbouring countries in the face of Western sanctions. Although in many ways life in both Moscow and Murmansk went on as normal—with a few shuttered Western shops and the absence of many Western brands on supermarket shelves being two noticeable realities—under the surface there was certainly a growing sense of unease. Now, however, just over a year later, much of that foreboding has dissipated.

Since the fall of 2022 Russia has fought off the much-vaunted Ukrainian counteroffensive, which was supported by some of the latest equipment that NATO could provide. The Russian armed forces that threw themselves forward with reckless abandon and insufficient preparation in the spring of 2022 on the Kyiv axis soon learned their lesson—the Ukrainian armed forces were not going to be steamrolled and a more methodical approach was called for. Very quickly, the Russian army regrouped, reorganized and much more methodically advanced—gaining significant territory in the east, most of which they still hold.

The mobilization of September 2022 turned out not to be on the scale that many Russians feared—it was quite clear that many young men were not going to be called up and many have now returned to the country. Some of them are opposed to the war on political and moral grounds, but it is difficult to gauge anti-war sentiment given the Russian government’s near total crackdown on dissent. To top up the tens of thousands mobilized in the fall Moscow decided to offer pay and conditions for those signing up for the armed forces that are enough to transform the lives of the families of those from the provinces and rural areas who have signed up in their thousands. As in Ukraine, how many are being killed remains a closely guarded secret.

Alongside high pay for soldiers (approximately 14 times higher than the median salary in some regions of Russia) Russian propaganda campaigns focus on ‘national projects,’ with new schools and hospitals being showcased in short infomercials on television. Where the money is coming from remains unclear. Inflation may be high, but there is abundant employment in the cities and for most life is far better than it was a couple of decades ago after the collapse of the Soviet Union. Vladimir Putin continues to enjoy sky-high public-approval ratings, and most Russians couldn’t care less about upstarts like Yevgeny Prigozhin or the oligarchs who got fat on the privatizations that followed the collapse of communism and who are occasionally picked off for stepping out of line.

Prigozhin’s abortive mutiny and subsequent demise seem to have contributed to a strengthening of Putin’s position. Even according to polling by the Levada Center, which is deemed a ‘foreign agent’ by the Russian government, the president’s approval rating is now above 80 percent, up from lows of around 60 percent immediately before the war. It doesn’t matter whether the pollsters are within or outside Russia—support for the war effort is evidently high.

Western sanctions were supposed to bring the Russian economy to its knees, but that clearly hasn’t happened. Although sanctions have hit the economy hard in some sectors (especially the high-tech industries), in others Russia has effectively found alternatives or successfully substituted Russian products. Fast-food chain McDonald’s has become ‘Vkusno i tochka’ (literally translatable as ‘Tasty and On Time’) with a logo reminiscent of an ‘M’ that not only reminds customers of its origins but in a way sticks a finger up at the West. The non-Western world can supply Russia with all the tea and coffee and other similar products it needs—and even many Western goods remain on the shelves as if there weren’t any sanctions.

There is a confidence in the air in Russia’s capital—and indeed in Ryazan, home of the Russian airborne forces in which I also spent a number of days last month—that was clearly lacking a year ago. Many Russians I have spoken to clearly believe that it is only a matter of time before the Ukrainian military collapses, as Russian television shows scenes of the Ukrainian authorities rounding up unwilling conscripts and pleas from Volodymyr Zelensky for more Western aid. Meanwhile, much of the Western press still continues to pretend that it is Russia that must be close to collapse—a wishful thinking that is increasingly far from the truth.

For many Russians the war now is an existential one. The Russian government has successfully argued that the war is aimed at a West intent on ‘cancelling’ Russia and its culture using Ukraine as a vehicle. The villain of the piece is undoubtedly the United States, towards which the vast majority of Russians polled by Levada continue to express negative attitudes. US focus on Israel’s war in Gaza has undoubtedly deflected some of the West’s attention from Ukraine—with the Russian press only too pleased to point out the hypocrisy of US support for an Israel only too willing to inflict casualties on the civilian population in Gaza at a rate far outstripping anything the Russian armed forces have committed in Ukraine.

Although it is specifically Russian language and culture that is seen to be being ‘cancelled’ in Ukraine and indeed the Baltic Republics as well, Russia itself has now started to focus much more on the idea of the Russian state as a vessel not only for Russian culture but all of the cultures of Russia—with a new racial tolerance apparent both in the media and on the street. This may to some extent reflect a cynical need for more troops, but it is nonetheless real. At a recent exhibition showcasing the activities and achievements of Russia’s regions in Moscow smaller regions such as Chechnya and Ingushetia have been given as much exhibition space as any other larger regions. The Russian media hails the heroism of soldiers from villages thousands of kilometres from the European part of the country who are serving a wider, ethnically diverse Russia. In St. Petersburg a recent conference promoting cultural diversity in the world—and the value of Russian culture as part of that diversity—was attended by hundreds of delegates from tens of countries, highlighting that Russia’s isolation from the West isn’t isolation from much of the remainder of the world.

That doesn’t mean that tolerance is now the order of the day in Russia. Obviously public opposition to the war is stamped out quickly, with the few celebrities who publicly display opposition soon being labelled ‘foreign agents.’ Even the famous singer Alla Pugacheva is not immune, although the Russian government has been wary of punishing her given her almost legendary status. The tolerance, even celebration, of Russia’s national minorities such as the Chechens has a corollary in that such ethnic groups are typically as, if not more, socially conservative than the Russian Orthodox Church, and willing to get behind the resurgence of ‘traditional values’ that means that Western-associated liberalism is in the crosshairs. A popular whipping boy is the LGBTQ movement, recently declared ‘extremist’ by the Supreme Court. ‘Anti-woke’ attacks on symbols of the culture war in the West seem to go down well with a vast majority of Russians, and contribute to a sense of Russia being a moral bastion again perceived Western ‘social decadence.’

As the bloodbath in Ukraine continues Russian morale clearly remains high. Russia has upped its game but is far from fully mobilized for war. In the face of the awoken bear some sort of mythical Ukrainian victory that would see it recapture territory lost since 2014 is increasingly unlikely, no matter how many tanks and fighter aircraft the West will deliver to Kyiv.

The more time passes the more urgent it becomes for the West to encourage Ukrainian leaders to restart negotiations with Russia that were cut short in the spring of 2022. Since then tens of thousands of lives have been lost on both sides. Many more may be lost for little change of the frontline in something akin to the later stages of the Korean War. It is now more than ever time to act to prevent the loss of tens of thousands more lives in a war that isn’t going anywhere soon, and in which there is unlikely to be a silver bullet for either side. It is unquestionably time to start talking about the sort of peace that will be a just one for all of those involved—whether they identify themselves as Ukrainian or Russian, and live in Lviv or Donetsk.

By Andrew Korybko, Substack, 1/24/24

This is a developing story. – Natylie

Kiev shot down a Russian Il-76 military transport plane carrying 65 Ukrainian POWs as it was flying over the border region of Belgorod on Wednesday. Patriot missiles were reportedly used during the attack, which was carried out with the aid of American instructors. The regime was informed of the flight ahead of time and was aware that it was carrying its captive troops. The planned swap has now been called off and questions are swirling about why Kiev would kill its own POWs.

CNN ridiculously suggested that it might have been a case of friendly fire by drawing attention to a prior air alert and drone interception an hour before the incident, while some Ukrainian sources circulated the conspiracy theory that the plane was allegedly carrying only S-300 air defense missiles onboard. The first narrative is meant to smear the reputation of the Russian Armed Forces while the second is a “face-saving” deflection from Kiev’s culpability for what happened.

A more realistic interpretation is that American proxy war tactics are shifting as the conflict began to wind down late last year after Kiev was pushed back on the defensive following its failed counteroffensive. That theory also has its faults, however, since five Russian military aircraft were reportedly shot down by Patriot missiles over the border region of Bryansk last May so there isn’t anything new this time except that 65 Ukrainian POWs were killed after Kiev knew they were on board.

The specifics of this incident therefore lead to suspicion that these captive troops were deliberately targeted by those American-advised Ukrainian air defense controllers who were operating the Patriot air defense systems on Wednesday for the reasons that will now be explained. The backdrop to what happened was that Russia’s foreign spy agency predicted an impending bureaucratic reshuffle on Monday a day before a former Pentagon official reported on rumors that Zelensky might oust Zaluzhny.

Stephen Bryen, who served as staff director of the Near East Subcommittee of the US Senate Foreign Relations Committee and as deputy undersecretary of defense for policy and is currently a senior fellow at the Center for Security Policy and Yorktown Institute, published the article on his Substack. According to him, the Ukrainian leader wants to replace the Commander-in-Chief with military intelligence head Budanov, and he’s planning to do so by blaming Zaluzhny for recent battlefield losses near Avdeevka.

Zelensky’s top rival commands immense respect among the armed forces and civil society, the first of which are growing so angry with their leadership’s military plans that there was even a whiff of mutiny in the New York Times’ report last month about the Kyrnki debacle. Aware of how much Ukraine’s already fragile military-political dynamics had been destabilized by the failed counteroffensive, an expert from the influential Atlantic Council called on Zelensky to form a “government of national unity” a month ago.   

Adrian Karatnycky’s demand was made through his article for Politico and sold as the best way to preemptively avert potentially forthcoming protests with the innuendo being that it could also neutralize any possibly impending plans for a military coup that could occur independently of those protests. The dilemma that Zelensky found himself in is that complying with Karatnycky’s proposal could signal weakness and lead to the end of his political career while removing Zaluzhny could lead to a mutiny.

Delaying any action also has its detriments too since grassroots and military pressure could reach uncontrollable proportions in the coming future, further worsening the strategic situation that he found himself in. Russia’s foreign spy agency didn’t mention any military reshuffle plans in their statement earlier this week, however, which might be because they were unaware of them or wagered that it’s better not to comment since doing so could influence the process in ways adverse to their interests.  

In any case, the sequence of events from mid-December up until Wednesday’s IL-76 incident – especially the aforementioned statement that preceded Bryen’s report about Zelensky’s plans to replace Zaluzhny with the much more politically reliable Budanov by a single day – suggested deepening intrigue in Kiev. After what just happened following Kiev’s downing of a plane full of Ukrainian POWs by American-advised air defense operators, the public pretext has now been created for replacing him if he wants to.

That’s not to say that Zelensky will certainly do so since any such a move is fraught with the very real risk of blowback due to how popular Zaluzhny is among the armed forces and civil society, but both categories of his supporters might only put up mild resistance if he’s blamed for this incident. It’s not implausible that Zelensky will either directly blame him or do so via media surrogates since he himself wants to eschew responsibility and he definitely doesn’t want anyone pointing fingers at America.

All things considered, blaming Zaluzhny – perhaps by claiming that he should have verified alleged intelligence about the IL-76’s cargo before shooting it down in order to make this seem like an unfortunate accident – is the most politically convenient option at Zelensky and his US patron’s disposal. It could shift the blame from them to him and facilitate Zaluzhny’s replacement with Budanov without much resistance from the armed forces or civil society.

As for why the US might want him to go, it could be that he’s deemed more amendable to the peace talks that America’s leading liberal–globalist policymaking faction is still reluctant to relaunch, in which case they could fear that a possible coup would stop their proxy war plans and doom Biden’s re-election. They might of course also calculate that the risk of a coup, which could possibly be preceded by large-scale protests across the country in his support, would spike with his removal and thus call it off.

Whatever ultimately ends up happening, it’s important for observers not to extend credence to CNN and Ukraine’s conspiracy theories about Russia accidentally shooting down its own plane and it supposedly only carrying S-300s respectively, since Kiev definitely knew that there were POWs on board. It therefore remains to be seen why its American-advised air defense operators still shot it down, but more clarity is expected as time passes and the military and/or political consequences of this incident become known.

RT, 1/8/24

Polish officials withheld evidence and attempted to stall an international probe into the bombing of the Nord Stream gas pipelines, making investigators “suspicious of Warsaw’s role and motives,” the Wall Street Journal reported on Monday.

The Nord Stream 1 and Nord Stream 2 gas lines – which linked Russia with Germany under the Baltic Sea – were destroyed in a series of explosions near the Danish island of Bornholm in September 2022. A joint inquiry by Germany, Denmark, and Sweden is ongoing, with investigators theorizing that a Ukrainian team rented a yacht in Germany from a Polish company, which they used to transport explosives to the blast sites.

When the investigators chased these leads in Poland, they found themselves stonewalled by government officials and law enforcement agents, the Journal reported, citing sources within the investigation.

Polish authorities failed to turn over testimony from eyewitnesses who encountered the yacht’s six-person crew in the Polish port of Kolobrzeg until pushed to do so by German police, the sources said. CCTV footage from the port was then withheld, and Poland’s internal security agency, the ABW, “failed to answer queries, obfuscated or gave contradictory information,” the newspaper stated.

Polish prosecutors said they found no traces of explosives on the yacht, despite never having boarded it to check, the investigators claimed. The investigation would later find explosive residue on the vessel, according to media reports.

The prosecutors reportedly told European investigators that the boat arrived in Kolobrzeg at 4pm September 19, when it actually moored seven hours earlier. Later in the investigation, the ABW told its sister agencies in Europe that the yacht “had links with Russian espionage,” the newspaper wrote, adding that investigators considered this “disinformation.”

According to all available information, no Western governments or intelligence agencies suspect that Russia was behind the bombings. Gas sold to Europe via the Nord Stream lines was a lucrative source of revenue for Moscow, and was seen as a powerful instrument of leverage for the Kremlin.

Poland’s efforts to hinder the investigators have made them “increasingly suspicious of Warsaw’s role and motives,” the Wall Street Journal noted. All of the alleged misdirection and obfuscation took place under Poland’s previous government, however, and unnamed “senior European officials” told the newspaper that they are considering contacting Poland’s new prime minister, Donald Tusk, in the hope that he will grant them access to police and security personnel who may have previously been pressured to stay silent.

According to an alternate theory put forward by American journalist Seymour Hersh, the CIA was responsible for the Nord Stream blasts. Citing sources within the intelligence community, Hersh argued that CIA divers working with the Norwegian Navy planted remotely-triggered bombs on the lines last summer, using a NATO exercise in the region as cover.

Bolstering this theory was a tweet by former Polish Foreign Minister Radoslaw Sikorski, who within hours of the explosions shared an image of a giant gas leak at the blast site along with the caption “Thank you, USA.”

Russian President Vladimir Putin has backed this explanation, stating last month that the sabotage operation “was done, most likely, by the Americans or someone at their instruction.”

By Ben Aris, Intellinews, 1/7/24

Russian gas exports to Europe have tumbled since the Nord Stream 1&2 pipelines were blown up last September but EU imports of Russian LNG have jumped by 40% since the invasion of Ukraine and are currently at record levels, according to a report by Global Witness. Europe remains Russia’s biggest customer for gas – both piped and as LNG – as the EU countries continued to spend $1bn a month on Russian Arctic LNG in 2023.

Russia is working very hard to make up what it lost from the collapse of piped gas by growing its LNG business, which remains unsanctioned – for now.

“Between January and July 2023, EU countries bought 22mn cubic metres of LNG, compared with 15mn cubic metres during the same period in 2021 – a jump of 40%,” the report said.

“This is a much sharper rise than the global average increase in Russian LNG imports, which stands at 6%. EU countries now buy the majority of Russia’s supply, propping up one of the Kremlin’s most important sources of revenue. Between January and July 2023 the EU bought 52% of Russia’s exports, compared to 49% in 2022 and 39% in 2021,” the report adds.

A similar report released by the Helsinki-based Centre for Research on Energy and Clean Air came to the same conclusion: the EU remains the leading consumer of Russia’s pipeline gas and LNG, buying in 41% and 50% of Moscow’s exports respectively. In the third quarter of 2023 Russia supplied about 12% of total EU gas imports, according to Eurostat, and about 8% of its LNG.

The biggest loser from the change was Germany, the biggest net importer of Russian gas in the EU, with 55 bcm in 2021 from the circa 150 bcm total exported to Europe, making up over 65% of the country’s gas imports.

The start of the war in Ukraine didn’t affect Russia’s gas exports to Europe in the first half of 2020 and the billions of euros paid into Kremlin coffers bailed out the sanctioned economy. But the destruction of the Nord Stream pipelines meant the total amount of Russian gas sold to Europe in 2022 tumbled to 80 bcm for the full year.

In 2023 the amount of gas Russia has sold to Europe will fall again to an estimated 25 bcm, partly due to Europe’s ongoing efforts to diversify its supply and because part of the Ukrainian pipeline was turned off due to the war. Nevertheless, Ukraine’s gas transit deal with Russia remains in place until the end of 2024, earning Kyiv a cool $4bn a year.

While Europe increased purchases of LNG from global producers in 2023 to start diversifying away from Russian LNG, it also sharply cut its imports of Russian pipeline gas.

Overall LNG exports from Russia were down 6% in 2023 year on year at 31mn tonnes, of which 15.8mn tonnes went to Europe, down by 1.9% on the previous year. 

LNG to the rescue

Europe’s energy market has been totally remade by the outbreak of war in Ukraine. Russia used to send 70% of its gas westwards via pipelines that were built as far back as the 1970s. Now it has to find new customers, but that system can’t be remade overnight. Many landlocked Central European countries have no access to LNG terminals and remain dependent on Russian gas imports.

And those with coastlines have become partly dependent on Russian LNG imports, as the deficit caused by the end of Russian piped gas can’t be fully replaced by just US and Qatari LNG.

Russia used to account for a third of Europe’s total gas imports, but as uncertainty over gas supplies to Europe sent prices skyrocketing in 2022, Europe successfully replaced most of the piped Russian gas imports with 130 bcm of LNG imports, largely supplied by Qatar, the US and Russia.

The US has only exported LNG since 2016 but at the start of 2023 it overtook Qatar to become the world’s largest exporter of LNG and available volumes will only grow now there are two more big projects in the pipeline to increase supplies.

Qatar could also step up supplies with the huge North field project that includes six mega LNG trains and is supposed to come online in 2025 that will massively increase its output, if enough customers willing to sign long-term supply contracts can be found.

Increases in LNG production between 2017 and 2022 led to a threefold increase in exports from 11mn tpy to 33mn tpy by 2022, of which half goes to the EU.

Russia was planning to triple its production again by the end of this decade to 100mn tpy and raise its market share from 8% to 20% at the same time, according to Deputy Prime Minister Alexander Novak.

“Russia has already become the fourth largest LNG producer with an 8% share [of] the global market. The plan is to increase LNG production from 33mn tonnes now to 100mn tonnes by 2030, with the share on the global market [having] increased to 20%,” he said when addressing the Federation Council in November.

But that ran into trouble after the US slapped fresh sanctions in December on its Arctic LNG-2 project.

Novatek, Russia’s LNG champion and the owner of the LNG-2 project, warned customers in December that it would not be able to meet all its delivery obligations in 2024 due to force majeure caused by sanctions imposed by the US.

The Arctic LNG-2 project involves the construction of three gas liquefaction lines with a total capacity of 19.8mn tpy based on the Utrenneye field on the Gydan Peninsula. The first line was planned to have been launched before the end of 2023, with shipments to begin in the first quarter of 2024.

Novatek has 60% of Arctic LNG-2. Other participants such as the French TotalEnergies, the Chinese CNPC and CNOOC, as well as the Japanese consortium of Mitsui and JOGMEC, each own 10%.

Russia may have lost its piped gas business, but the LNG business is growing fast. Global trade in LNG will grow by another 25% to 500mn tpy in five years, according to the International Energy Forum (IEF). China has overtaken Japan to become the world’s largest LNG importer, and the US will have become the biggest LNG exporter in 2023.

LNG currently accounts for about 15% of the world’s total volume of gas supplies. The US was the world’s largest LNG exporter in the first six months of 2023, according to the Energy Information Administration (EIA), and hopes to capture a large share of the burgeoning LNG market.

In Europe, LNG’s share of the demand mix has expanded from 12% ten years ago to more than 50%, and European regasification capacity is predicted to grow by another 48% by 2030.

Russian LNG supplies

Despite the reduction in the amounts, Europe remained the biggest importer of Russian gas in 2023 and Russia’s best customer, as supplies shifted from piped gas to LNG.

LNG currently represents 45-50% of the EU’s total gas imports and in November Russia’s LNG exports to the EU hit an all-time high of more than 1.75mn tonnes.

In 2023, the US supplied the largest share of the EU’s LNG (40%), followed by Russia and Qatar, which both have a market share of around 13%. Throughout 2023 Russia’s LNG exports to the EU have amounted to 15.5mn tonnes, on a par with exports in 2022.

Conversely Europe remains Russia’s biggest buyer of LNG, accounting for half its total sales, with Spain, Belgium and France being by far the largest customers. EU ports receive in excess of 200 shipments per year from Russia’s Yamal LNG facility. The volume of imported LNG is now so significant that it has surpassed other forms of Russian fossil fuels.

Russian LNG is still not subject to sanctions, as Europe still cannot find enough LNG from elsewhere to meet all its needs. Imports of Russian LNG, mostly via tankers, jumped 40% in the period between January and July 2023 compared to the prewar levels, according to environmental watchdog Global Witness.

And some of Russia’s LNG arrives in the EU via third country intermediaries. Bulgaria, for example, was cut off from Russian gas in 2022 when it refused to pay for its gas in rubles, but it still receives Russian LNG indirectly, buying it from Greeks that are in turn customers of Gazprom.

Germany also bought 23% of its natural gas imports from Belgium in the first three months of 2023, which, during the same time period, imported 60% of its LNG supply from Russia, according to the Center for the Study of Democracy. And ardent Kyiv supporters Lithuania and Estonia secretly purchased €6.1bn worth of LNG from Russia in 2023 despite the promise to refuse its fuel, The Telegraph reported in December citing Eurostat service data.

As a result, Russia’s share in the EU gas supplies is likely to be a lot higher than the official 13% of the total reported by Eurostat.

LNG sanctions

As part of the ongoing efforts to deny the Kremlin access to revenues it can earn from oil and gas exports, the US is now pushing for sanctions on Russia’s LNG exports – and clashing with the EU as a result.

Since the advent of the shale revolution in the US it has become a net exporter of oil and LNG since 2016. In January this year it became the world’s biggest exporter of both, with its crude exports overtaking those of the Kingdom of Saudi Arabia (KSA) and its LNG exports overtaking those of Qatar.

However, because of their deficiency in oil and gas, some of the EU member states are reluctant to go along with a ban on buying Russian LNG, as even the US’ increased output is not enough to replace Russia’s supplies in the EU’s fuel mix.

But the European Commission executive is continuing its campaign to tighten the noose around Russia’s neck. The EC is preparing to give its member states powers to block Russian gas imports in a bid to curb Moscow’s energy revenues, the Financial Times reported on December 8, citing a draft document seen by the outlet.

The proposed powers provide a way for European firms to break energy contracts without paying penalties, as they can cancel deals that allow Russian and Belarusian companies to buy capacity in pipelines and LNG terminals.

The restrictions on access to pipeline capacity are similar to the oil price cap sanctions insomuch as they don’t ban purchases of gas outright, but instead seek to use a market mechanism to limit Russia’s ability to sell its gas.

The Netherlands and UK have already banned the transhipment of Russian LNG, but Belgium, Spain and France have permitted the import and re-export of Russian LNG to continue, arguing that it is difficult for their companies to extract themselves from existing contracts.

Like the Greek tanker fleet that continues to transport Russian crude oil from its ports in the Baltic Sea to Asia, European companies are reshipping a fifth of their imports of Russian LNG to other parts of the world, helping Russia maximise its fossil fuel revenues, the Financial Times reported on November 29.

The EU imported 17.8 bcm of Russian LNG between January and September 2023, 21% of which was transferred to ships headed to countries such as China, Japan and Bangladesh, the FT said, citing data from the Institute for Energy Economics and Financial Analysis.

The practice allows Russia to make more efficient use of its Arctic fleet, as its icebreaking tankers can offload their cargoes of gas from the Siberian Yamal LNG plant to warm-water LNG tankers that take it on to countries around the world, allowing the icebreakers to return to Russia’s frozen Barents Sea sooner.

Yamal LNG has a 20-year contract with Belgian natural gas company Fluxys that ends in 2039, the FT said. Yamal LNG also has a contract with SEFE, a formerly Russian firm that was nationalised by the German government. However, even the new German management of SEFE refused to cancel its Russian contracts in October, saying that pulling out would cost German taxpayers over $10bn.

Still hooked on Russian piped gas.

Russia’s share in Europe’s overall gas supplies has been reduced dramatically after the Nord Stream 1 & 2 pipelines were destroyed, but it remains a major supplier – and its share in European supplies is very likely to start climbing again as more LNG capacity is built and new planned pipelines via Turkey come online in the coming years.

Russia supplied as much as 95% of Hungary’s gas in 2021 but less than 10% of Spain’s in the same year. Hungary continues to be almost entirely dependent on Russian piped gas.

In 2021, Prime Minister Victor Orban’s government negotiated a 15-year contract, under which Gazprom would ship 4.5 bcm of natural gas to Hungary annually, via TurkStream and via Ukraine.

In 2022, after Russia’s invasion, Budapest signed a new deal with Moscow for additional quantities of Russian gas. Three-quarters of the deliveries (3.5 bcm) flow through TurkStream, with a smaller portion (1.5 bcm) being delivered through Ukraine.

Likewise, Serbian President Aleksander Vucic has signed off on long-term Russian gas supply deals and is attempting to navigate between an EU membership bid and maintaining good business relations with Russia.

Austria is also still 80% dependent on Russian gas. Austrian energy company OMV signed off on a new long-term gas supply deal until 2040 with Gazprom after the war in Ukraine had broken out.

Slovakia, Italy and Croatia also receive Russian gas through Ukrainian transit routes under long-term contracts with Gazprom, according to the Centre on Global Energy Policy. However, these countries have alternative supply route options and are likely to switch to other sources in the future.

Spain has never been dependent on piped gas, which it imports as LNG. Spain and Belgium both have the largest regasification terminals for the liquid fuel in Europe and have become the biggest importers of Russian LNG behind China. As a result, Spain has seen its dependence on Russian gas soar in the last year, becoming one of Novatek’s best LNG customers in the process, and Russia is now Spain’s biggest supplier of LNG. The fact that the EU is set to import a record volume of LNG from Russia in 2023 has been largely due to the LNG trade going through Belgium and Spain.

Unlike the US, the EU has not yet imposed any sanctions on liquefied gas imports. From December 2022 to October 2023 half of Russian LNG exports, worth €8.3bn, were directed to the EU market.

Russia secured the top position among gas suppliers to Spain in June 2023, up from fourth at the start of the year and behind the United States, Algeria and Nigeria, according to Spanish energy company Enagas. In 2023 as a whole, Russia’s supplies to Spain expanded by 39% y/y.

Turkish gas hub

Gas deliveries to Europe could start rising again in the near future if a mooted Turkish gas hub plan is put in place. The scheme, cooked up by Turkish President Recep Tayyip Erdogan and Putin, would see up to 100 bcm of gas from Algeria, Azerbaijan, Russia as well as LNG delivered to a hub in Turkey before being distributed to the rest of Europe.

The idea is that once molecules of methane arrive in the hub they lose their nationality; the upshot is that Russia would be able to export large amounts of its gas to Europe again, as its gas would account for the vast majority of the 100 bcm transiting the hub.

Erdogan also wants to see the capacity of the TurkSteam pipeline doubled. It came online in January 2020 with a nameplate capacity of 35 bcm, but just under half of that volume is dedicated to serving the Turkish market. Plans are now under discussion to build a second pipeline to lift its total capacity to 60 bcm and transport gas to the EU via Bulgaria. TurkStream continues to supply Serbia, Hungary, North Macedonia, Bosnia-Herzegovina and Greece through its network of pipelines.

By Gilbert Doctorow, Website, 1/8/24

Yesterday I was reading a speech about the Russia-Ukraine war that was recently delivered by one of America’s most experienced and independent-minded diplomats who is now in semi-retirement. The speech exemplified both the merits and the drawbacks of his profession.

By nature, diplomats look for compromises that can result in negotiated settlements to conflicts. In the given instance, the logic of diplomacy is to say that none of the protagonists in the Russia-Ukraine war, both those named and those unnamed, meaning the foreign backers of the Zelensky regime, has achieved its maximal goals, and so all should sit down at a table and reach a settlement that satisfies none but puts an end to the killing.

However, sometimes there are clear winners and losers

If one has to look for a loser, Ukraine is the stand-out. It has lost in every dimension: lost territory; more than 500,000 killed and maimed soldiers; destroyed military hardware, including the Wunderwaffe received from the USA and Europe; economic collapse; heavy losses of population as millions of refugees fled West and East. This irremediable disaster is every day acknowledged by more mainstream media in the West and explains the reluctance of politicians in Washington and Brussels to continue funding the war.

As for winners, most commentators in the West, including the referenced diplomat in his recent speech, are reluctant to admit the obvious. The big winners from this war are the United States and Russia.

These commentators measure the success or failure of the United States in this latest foreign adventure against its stated aim at the outset: to deal devastating blows to the Russian armed forces and to the Russian economy, thereby ensuring that the country would be unable to unleash an aggressive war against any of its neighbors for decades to come. If I may translate this into standard English: to eliminate Russia from the short list of world powers and enable the United States to move on to its greater task of vanquishing China, and so ruling the roost unchallenged.

Of course, the United States has failed in this mission as we will see in a moment when we look at the other side of the coin, namely how Russia has fared.

But it would be an unforgivable mistake to take Washington at its word. I venture to say that the greater objective, which could not be stated publicly, was to reinforce American subjugation of Europe for the sake of financial gain and to bulk up for the showdown with China.

In this regard, the Ukraine war has paid off handsomely for Washington. The destruction of Nord Stream with the complicity of the German government completed the severance of Europe from cheap Russian pipeline gas that had been a steadfast American objective since the mid-1990s. Instead, Europe became dependent on American LNG, propelling the United States into a world beating position on energy markets and yielding windfall profits from sales to the Old Continent.

Inflated energy costs hastened the deindustrialization of Europe and redirection of investments in industrial capacity by European firms to the United States, where energy costs are three or four times lower. Meanwhile, cleaning out the stores of military weaponry in Europe to assist Kiev under Washington’s direction has meant that all European NATO countries are utterly dependent on new U.S. weaponry to refill their arsenals. Without such deliveries, they cannot presently resist a Russian ground offensive for more than a few days of intensive artillery battles. The European leadership understands this fatal weakness very well and it makes them utterly compliant with Washington’s wishes in all matters.

However, I believe this subjugation of Europe is against the laws of nature and is untenable. In the foreseeable future, there will be a revolt against Washington and/or the collapse of the European Union over its role as facilitator of American domination. We may expect the political forces now categorized by Western media as the ‘Extreme Right’ to lead the fight for national liberation and overthrow the shackles that Washington has forged. The June 2024 Europe-wide elections will be an important test.

What about Russia?

Serious commentators in the West all recognize that the Russian economy has shown unexpected resilience and that the war economy has yielded positive growth, while Europe stagnates or enters recession. Curiously, attention is drawn to the important role of military orders in Russia’s expanding economy as if that were a negative factor for predicting Russia’s future economic prospects. But if the military industrial complex has been for decades and remains today a major sponsor of research and industrial innovation in the United States, which is obvious as day to any investor in Boeing, for example, then why should it be any different for the Russian economy. To those with eyes to see and with minds open to the facts, it is clear that Russia is going through very fast paced reindustrialization in all sectors.

Observers of China have long told us that the country cannot easily be replaced by Vietnam or India as the world’s factory because they have learned to optimize the organization of production on the factory floor and in this regard they have gone well beyond the Western companies whose designs they turn into goods.

Meanwhile Russia has made its own breakthroughs. The time spent from establishing new product requirements for the armed forces in the field through the time needed to design and manufacture suitable products en masse was reduced from 7 years to 7 months during 2023 and this energy is spreading across the economy. The links between basic science, applied science and serial production were always very weak in Russia. No longer.

Import substitution has been a slogan in Russia ever since the West imposed harsh sanctions on the economy in the summer of 2014. Now, with the generalized reindustrialization of Russia, the notion has grown legs.

At the same time, Russia has continued its program of heavy investments in civilian infrastructure. The emphasis, of course, is on European Russia, which is being knit ever more closely together by newly opened world class intercity highways, high speed trains and new airports served by Russian built civilian planes. But more and more funding has been assigned to logistical solutions for the Far North, Eastern Siberia and the Pacific Maritime regions in support of the Northern sea route and in support of the extractive industries. All of this lays the groundwork for a fast growing national economy in the future.

And what about Russia’s military strength?

At the level of strategic weapons systems, the past couple of years have witnessed the completion of a modernization program for Russia’s nuclear triad that puts the country well ahead of the United States in this domain. Among the strategic weapons that are now being put into regular service are a new ICBM that carries multiple hypersonic attack missiles that can pulverize whole nations at a go.

But let us recall that even in the 1990s Russia’s status as a nuclear superpower was not doubted even if loudmouth American politicians insisted that the nukes were useless since a nuclear exchange would yield no winners. Instead, they pointed to the utterly demoralized and underequipped Russian conventional forces that performed so poorly in the Chechen wars at the end of the last century and were said to remain underpowered and unimpressive during the Georgian war of 2008.

The situation today is vastly different. The challenges of the Ukraine war have compelled Russia to equip and train what are arguably the strongest conventional armed forces on the Continent if not in the world.

A lot of Russian IT geniuses may have emigrated to the United States since the 1990s to work for Google and others in Silicon Valley. Still more fled abroad in the opening months of the Special Military Operation. But there is always a surfeit of talent in a field like this, and the loyal souls who stayed at their work desks have created Electronic Warfare technologies, reconnaissance and attack drones, as well as other essential instruments of defense and offense for the battlefield that even Russophobes at The Financial Times are compelled to recognize as world beating, as we saw on their pages several days ago. Russian tanks, armored personnel carriers, attack helicopters every day prove their superiority to NATO analogues on the battlefield, and this helps explain the 8:1 or 10:1 advantage in the kill rate of the Russian armies against the combined Ukraine-NATO troops today.

Until very recently, it was commonplace to find our mainstream commentators speaking of China as having the world’s second strongest military after the United States. Now I am reading on the pages of the FT that endemic corruption has been a blight on the Chinese military. It would appear that by trashing China, the editorial board is preparing the way for stating what is there for all to see: that Russia is now the number two military in the world.

Why is Russia not number one? Because Russia’s leadership has its mind on the ball. The Soviet Union sought to be a superpower, meaning capable of projecting force all across the globe. The Russian Federation has no such ambition. It seeks to be a hegemon in its own part of the world, meaning the Former Soviet Union and Eastern Europe, and to be a major player at the global Board of Governors alongside peers that include the USA and China, among others. To do this Russia has almost no need for military bases abroad, and it has no more than you can count on one hand. It has no need of aircraft carriers, which it does not build, concentrating instead on corvette sized naval vessels that are armed with hypersonic and other devastating missiles, as well as nuclear submarines carrying ICBMs and also hypersonic missiles for use in regional hotspots. These are being turned out and commissioned in the shipyards at a fast rate, as we heard and saw over the past couple of months of official commissioning. Those shipyards, are, by the way, now run by one of the most capable managers in the country, VTB Bank CEO Andrei Kostin.

The lecturer whose speech I read yesterday spoke of Russia’s cutting ties with Western Europe as the end of 300 years of immersion in European culture, and the present pivot of Russian foreign policy to China and the Global South as driven by necessity, a kind of forced isolation.

To be sure, the current split from Europe may last a generation, since feelings are very bitter on both sides. However, even in present conditions, the ‘cancel Russia’ policies in Europe that we saw at the start of the Ukraine war are fading. In the domain of culture above all Russia is indispensable if audiences are not to die of boredom, and Russian divas are once again on our opera stages. I have little doubt that Russian stars of other performing arts will soon reappear here. When some kind of settlement to the war finally occurs, Russia will slowly make a comeback in Europe.

However, it is a false and under-informed opinion to see Russia’s pivot to what we used to call the Third World as something new. The foreign policy orientation of the Soviet Union was internationalist in the broadest sense. It made fast and true friends across Africa by supporting the national liberation movements. It did the same by supporting Castro and other leaders in Latin America striving to get out from under the boot of Washington in their hemisphere. As for East Asia, apart from China, with which relations blew hot and cold, there was active cultivation of relations with Indonesia, with the countries of Indochina during Soviet times. But whereas the objective of Soviet policy was formation of blocs where possible, the RF objective is to release countries from control by Washington and its allies so that they may pursue their own national interests, which may diverge from Russia’s in many ways.

The single most flagrant error in the analysis of the enlightened and independent minded diplomat whose lecture caught my attention was to measure Russia’s success or failure in the Ukraine war by what we impute to Russia and not what Russians themselves define as their aims. In this war, Vladimir Putin listed three tasks at the outset: to demilitarize Ukraine, to denazify the country and to ensure it does not join NATO. The most important among them is, of course, ‘demilitarization’ which means crushing the Ukrainian armed forces. From this the other two follow necessarily. And destruction of the Ukrainian army is now a realistic expectation in the foreseeable future.

I have little doubt that this war will end, quite possibly in the coming six months, with a peace settlement that amounts to Ukrainian and Western capitulation to Russia’s demands. Winners take all!