Billionaire investor George Soros says that President Vladimir Putin is not in such a strong bargaining position as he pretends to be and, in fact, the EU has an advantage that should be used wisely.
Soros’s argument is based on the fact that the natural gas reserves of the Russian Federation are almost full, and the country does not have additional gas storage resources. If the EU cuts off or significantly restricts natural gas imports from Russia, then the Kremlin will have to stop and seal up to 12,000 wells, which in turn will lead to huge technical and economic losses.
“It is estimated that Russian storage capacity will be full by July. Europe is his only market. If he doesn’t supply Europe, he must shut down the wells in Siberia from where the gas comes. Some 12,000 wells are involved. It takes time to shut them down and once they are shut down, they are difficult to reopen because of the age of the equipment”, Soros said.
In an open letter to Italian Prime Minister Mario Draghi, Soros explained that Putin was using natural resources to blackmail the EU. The sharp rise in natural gas prices in the region is due to the artificial shortage created by Russia.
“That’s what he did last season. He put gas in storage rather than supplying gas to Europe. This created a shortage, raised prices and earned him a lot of money, but his bargaining position is not as strong as he pretends”, Soros wrote in the letter.
Information on the state of strategic reserves of the Russian Federation is not public, although experts predict that in the near future their load will reach maximum capacity, after which Russia will have to either increase gas supplies to the international market or suspend the extraction process itself.
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