As punishment for the Russian invasion, which initially sought – and failed – to capture Kyiv, the capital, and topple the government of President Volodymyr Zelensky, Western powers have imposed an extraordinary barrage of economic sanctions and export control measures aimed at crippling Russia’s economy. But the results have fallen short of expectation as energy prices soared and Russia redirected sales of gas and oil to Asia.
Speaking on Wednesday, Putin called the price caps on oil and gas proposed by G7 “stupid” and portended they would only further destabilise Europe’s own economy. He also threatened that Russia would walk away from the existing supply contracts if the caps took effect.
“Will there be any political decisions that contradict the contracts? Yes, we won’t fulfil them. We will not supply anything at all if it contradicts our interests,” Putin said, underscoring Moscow’s turn toward Asian markets.
On Friday, Gazprom, the Russian state-owned gas behemoth that operates critical pipelines supplying Europe, indefinitely halted the flow to Germany through the Nord Stream 1 pipeline, which accounted for about 35 percent of all European gas imports from Russia last year.
In a further ominous development, Russian officials and pro-Kremlin Telegram channels this week have widely shared a video purportedly showing Europe freezing in winter. The clip shows a Gazprom employee walking toward a turned-off gas valve, followed by scenes of a snowed-covered city. Online sleuths identified the frozen city as Krasnoyarsk in Siberia, which does not use natural gas but suffers from air pollution as a result of coal-fired power plants.
In his speech, Putin rejected the EU accusation that Russia was using energy as a weapon and reiterated Russia’s prior assertion that technical problems caused the pipe to break down, complaining that the West was not providing a crucially needed turbine to repair it.
“Nord Steam 1 is practically closed now,” Putin said Wednesday. “There is an oil leak there – it’s a possibly explosive situation, a fire hazard. . . . Give us a turbine, and we will turn on Nord Stream 1 tomorrow. But they don’t give us anything.”
Putin, however, craftily offered that Moscow was ready to “press the button” and pump gas “as early as tomorrow” through the Nord Stream 2 pipeline, which Germany has blocked from beginning operation much to the Kremlin’s fury.
The Russian leader also dangled restrictions on another crucial European import over which Moscow has leverage: grain.
Putin claimed that most of the grain recently released from the Ukrainian ports thanks to a Turkey-brokered deal to end a Russian blockade was going to the European Union instead of developing nations.
Accusing the West of “colonial” behaviour, Putin said grain shipments to Europe should be cut off.
“Once again, they simply deceived the developing countries and continue to deceive them. . . . With this approach, the scale of food problems in the world will only grow,” Putin said. “Maybe we should think about restricting that route for grain and trade food? I’ll definitely consult with the Turkish president.”
Putin scoffed at suggestions that the impact of Western sanctions would devastate the Russian economy, noting that it would contract only by “around 2 percent or a little more” and that Russia’s 2022 budget would be in surplus.
“Russia is coping with the economic, financial and technological aggression of the West,” Putin said. “We have passed the peak of the most difficulties, and the situation is normalising.”
These assessments contradicted Russian policymakers at the Russian Central Bank and the Ministry of Economic Development, which recently said that while the economy has held up better than expected so far, 2023 could be far more challenging as the effects of more sanctions are felt.
“No matter how much someone wants to isolate Russia, it is impossible to do,” Putin said. “You just need to look at the map.”
The Eastern Economic Forum, which is held annually in Vladivostok to promote investment opportunities in Russia’s Far East, boasted few Western guests this year.
At Wednesday’s plenary, Putin sat next to Myanmar’s junta leader, Min Aung Hlaing, who has been sanctioned by the United States for human rights violations.
In August, Myanmar announced it planned to import oil from Russia, and this week Min Aung Hlaing told Putin that the country was prepared to pay for the imports in Russian rubles, aiding Russia’s goal of detaching itself from the US dollar.
China’s top legislator, Li Zhanshu, and high-ranking officials from Armenia and Mongolia also attended the forum. Russia’s ambassador to Beijing, Andrey Denisov, announced Wednesday that Putin was set to meet Chinese President Xi Jinping on the sidelines of a summit in Uzbekistan next week, in their first face-to-face encounter since the invasion of Ukraine.
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