Putin destroyed the Russian economy. The only thing he can still lean on is oil, Amos Hochstein, an adviser to US President Joe Biden, said in an interview with CNBC.
Putin’s war in Ukraine is taking its toll on the Russian economy. The Kremlin may mock the West for its economic sanctions, but the numbers speak volumes. According to the estimate of the Russian Central Bank, the Russian economy will fall by 3.5 percent this year. And it will not return to growth next year either.
Even last year, Russia was the largest supplier of natural gas and oil products to the EU. But the war in Ukraine changed everything. “Despite available production and transmission capacities, Russia has reduced its gas supplies to the EU by almost 50 percent year-on-year since the beginning of 2022,” according to the International Energy Agency.
“Russia will no longer sell gas to Europe, so it only has oil left to finance this war,” said Hochstein.
Brussels is planning to temporarily limit the price of gas in the main trading hub
The European Commission is preparing a set of measures to reduce gas prices, including a “dynamic” ceiling for trading in the key Title Transfer Facility (TTF) virtual hub. This mechanism would be in place until a new price index for liquefied natural gas trading is launched, which could be next spring. This follows from the preliminary plan of the Union executive.
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„Energy is now the number one problem in the world. Unfortunately, or maybe fortunately?” added the Biden adviser, saying that the future of energy is in renewable sources. According to him, the world should get rid of dependence on oil and gas.
At the same time, Hochstein appealed to the states in this area to start acting as quickly as possible and create a safer environment for the development of new technologies in the energy sector. He reminded that the USA will spend over 370 billion dollars (nine trillion crowns) on climate and energy programs in the following years. The government plans to introduce or increase support for the purchase of electric cars or the installation of solar panels and wind farms. Tax breaks for nuclear energy and carbon dioxide capture technologies are also planned.
Until next winter is critical. When will there really be no more Russian gas, energy experts warn
Politicians and households fear the coming winter, the lack of energy and its high prices due to the reduction of Russian supplies. But next winter will be even worse, warn the heads of powerful oil and gas companies. Governments should therefore prepare for even bigger demonstrations and strikes than those that have recently taken place in France, Germany or the Czech Republic, the CNBC server wrote.
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The situation in Czech industry worsened sharply in October. It’s the worst in two and a half years
News from companies
Conditions in the Czech manufacturing sector worsened sharply again in October. The decline in the health of the sector accelerated for the second month in a row and was the largest since May 2020. In October, the PMI index fell to 41.7, from 44.7 points in September. This was reported by S&P Global. The 50-point level in the index is the dividing line between growth and decline. The index thus signaled a sharp deterioration in operating conditions in Czech production.
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