Russia has lost $100billion (£82billion) in gas revenue since the start of the war in Ukraine last February, and experts say this will lead to a “catastrophe” for the country’s economy. Economic experts from the Yale Chief Executive Leadership Institute say Russia will not be able to replace the income they used to get from Europe.
Jeffrey Sonnenfeld and Steven Tian tell Express.co.uk that Russia cannot replace China as its biggest customer for gas as Europe weans itself off Putin‘s resources.
Prior to the invasion of Ukraine in February 2022, Russia exported around 83 percent of its gas to the EU. The bloc imported 40 percent of its gas from Russia.
Now, Europe is close to sourcing 0 percent of its gas from Moscow, leading to a huge drop in Russian gas revenue.
Mr Tian explained: “$100billion is what Russia lost in the last year. Moving forward they are going to lose even more because in 2022 Europe was still buying gas from Russia.
“Going forward, Europe is never going to need Russian gas again. All of that 83 percent of Russian gas that went to Europe is going to have to go somewhere else.
“It was 170 billion cubic metres that Russia sent to Europe compared to just 16.5 billion cubic metres to China (in 2022). That’s less than 10 percent of what they sent to Europe.
“Half of the Russian government budget comes from oil and gas. All of that is gone, that’s massively impactful, but we are only just starting to see the impact of that in Russia.
“In 2022 the impact was cushioned, but moving forward the loss of this gas revenue will be permanent. It will be catastrophic and there’s no way for Russia to resolve that.”
Mr Sonnenfeld also explained how Russia‘s invasion and attempts to pressure Europe with the withdrawal of gas supplies have only caused more harm to the Russian economy.
He added: “The only thing Putin had other than a collapsing army was energy. Now there is nothing that Russia brings to the world marketplace other than raw materials.
“They have no value added to the world market, and now the world is finding alternatives to their resources. All Putin has done is set his country back 30 years in terms of trust from the markets.”
Other experts agree. As a senior consulting fellow at think tank Chatham House says, Putin’s plan has been damaged by Europe’s warm winter.
Fears at the end of 2022 about blackouts and gas rationing in Europe have not come to fruition, and warmer-than-expected weather has also helped the continent get through the winter.
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