Time to bust some myths about #sanctions collateral damage! The sanctions debate is heating up in the West and a lot of criticism is focused on two things: High #energy prices and high #food prices. However, most get the causalities wrong: 1/
1.) Why is food expensive? E.g. wheat prices have been rising for a couple of years, partially due to Covid-related supply chain issues. When the war began, prices exploded for a few months, as Russia blocked Ukraine's exports, but right now wheat is cheaper than in late 2021. 2/
A quick reminder: The West explicitly avoids sanctioning anything related to food security. Even when effects are very indirect, measures are taken to mitigate them (like some adjustments in the latest sanctions round - this was no "deal" with Russia but is simply EU policy). 3/
2.) Why is crude #oil expensive? Oil prices have been rising throughout 2021 as the world economy has been recovering from Covid-19: Demand increased and supply couldn't keep up. But: Prices are now at exactly at the same level as in February, before #Russia started its war. 4/
By the way, due to #sanctions, Russia has to sell its oil cheaper than other oil producers, so Moscow currently gets a lot less dollars for its barrels than before it started its invasion (in February more than $90, now $68 per barrel). 5/
3.) Finally, why is natural #gas expensive? Because #Russia has artificially reduced supply since 2021! EU #sanctions explicitly exempt anything that could cause problems for energy security. If sanctions actually were the issue (e.g. turbines), it would be corrected quickly. 6/
There is a good debate to be had about why #Russia chooses to cut off #gas to the EU. Is it revenge for sanctions? Is it our arms deliveries to Ukraine? My best guess is that it is both: The totality of the EU's measures against Russia's invasion to Ukraine. 7/
This thread is not comprehensive; food security is more complex, and electricity would be a whole story for itself. But: Please stop blindly repeating the line that Western sanctions are the primary cause of high food and energy prices! It is simply not true. 8/8
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I'm really baffled by how little reporting there is on #Olenivka in Western news. In all likelihood, Russians locked dozens of Ukrainian POWs inside a building and then exploded an incendiary bomb inside. If confirmed, it is one of the worst war crimes of this century.
And the few articles I see mainly go like this: "Russia's version is" and "Ukraine's version is", and it is still characterized as an attack, not a massacre.
I rewatched yesterday's 8pm @tagesschau. After giving long minutes to Putin's parade, only one sentence on #Olenivka: "Unclear who is responsible."
Vorsicht mit diesen Theorien, die erzeugen ein falsches Gefühl der Sicherheit. Gazprom hat nach eigenen Angaben die Gasproduktion bereits massiv gedrosselt, um dieselbe Menge, die es bislang in die EU exportierte. Finanzielle Schäden sind für Putin offenbar kein Hinderungsgrund.
Man könnte auch fragen, warum Putin sich um die Wiederaufnahme der Produktion Gedanken machen sollte, wenn wir gleichzeitig (wie im Tweet zurecht gefordert) die Energiezusammenarbeit endgültig beenden. Rational wäre das nicht.
One of the many issues I have with the #Yale paper on #sanctions effects is their take on Russian FX reserves, which the authors claim are "bleeding out fast". The chart is in dollars, the reserves are not. The dollar appreciated by 10%. You do the math! 🤷
Will use this thread for more minor issues in the #Yale paper. Not crucial, but corroborates overall impression:
- 725bcm is Russia's total, not Gazprom.
- gas dependency chart is based on secondary source (ING), not the latest Gazprom data.
- the 83% "Europe" includes Turkey.
For some reason, the #Yale paper claims that Power of Siberia was financed by China, while in fact it was fully financed by Gazprom. 🤔
Nobody really knows if #NordStream1 goes back online, but the bigger picture is clear: #Russia is tightening the screws with a slow-motion gas cutoff. And Russia will have to continue to tighten: The European energy crisis is one of the few successes of #Putin in this war. 1/
The underlying motivation for #Putin for cutting off gas is only becoming stronger: 1.) The West's role in the Ukraine war is increasing. It may not have been crucial in the first phase, but it is important now, and over time, Ukraine will be fighting mostly with Western arms. 2/
Motivation 2.): #Russia will fall into a deep economic crisis towards the end of the year, the situation will be much worse than now, and Putin needs a crisis in the West for his propaganda to work with if he doesn't want to look weak. 3/