21 Feb 2023

US dollar to lose global dominance – Putin

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The Russian president says Moscow will cooperate with its partners to develop a safe system for international settlements

The US and other Western currencies will inevitably lose their leading position in global cross-border transactions, Russian President Vladimir Putin said on Tuesday.

Delivering his annual address to the Federal Assembly, the head of state said that Moscow would cooperate with its allies to build a secure system of international settlements that are not dependent on the dollar or the euro.

According to Putin, the current policies of Western states are causing the US dollar and the euro to lose their universality in international payments.

He explained that Russia’s former Western partners are forcing Moscow to cut settlements in dollars and other Western currencies.

In December, Putin stated that the share of ruble transactions in Russia’s foreign trade had doubled since the beginning of 2022, and now accounted for one third of the country’s settlements. He projected that the use of national currencies in place of the US dollar and euro in trade with Russia’s international partners would continue to grow.

The process of de-dollarizing the Russian economy started back in 2014, when Western nations introduced the initial sanctions against Moscow over Crimea’s reunification with Russia, which was formerly part of Ukraine. Sanctions imposed since the start of the military operation in Ukraine have sped up the process, particularly after over $300 billion in Russian foreign exchange reserves and other assets were frozen by the US and its allies.

21 Feb 2023

Western sanctions on Russia failed – Putin

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The economy turned out to be much stronger than expected in the West, the president has said

The expected economic destabilization resulting from the “theft” of Russia’s foreign exchange reserves by the West did not materialize, President Vladimir Putin stated on Tuesday.

According to Putin, the economy has overcome all of the sanctions-related risks and is actually entering a new cycle of economic development.

“There are opportunities for a breakthrough in many areas,” he said, addressing the Federal Assembly in his key annual program speech.

Putin noted that Russia’s GDP in 2022 decreased by just 2.1%, according to the latest data, despite Western projections of a decline of up to 20%.

The government poured in more than 1 trillion rubles (over $13 billion) to support the economy amid the Western sanctions, he said.

“The sanctions have provoked price increases and other problems in the West itself, but they are trying to blame Russia for everything,” Putin stated.

The president called on the government to bring the economy to new frontiers of development.

21 Feb 2023

Germany to double down on renewable energy – official

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Berlin is aiming to reach its climate goals by 2030, according to the Economy Ministry

The German government will do most of the work this year to prepare its power market for greater reliance on renewable supplies by the end of the decade, Economy Minister Robert Habeck announced on Monday.

Habeck aims to overhaul the 550-terawatt hours a year (TWh) market amid rising demand as the EU’s largest economy moves away from fossil fuels under its climate commitments.

“We will do most of the necessary work in 2023,” the minister told a consultation meeting on power market reform, noting that the goal is to generate 80% of electricity from wind and the sun by 2030.

According to the minister, the government will prepare tenders for gas-fired power capacity to back up green power as nuclear and coal production is phased out. A strategy for the tenders will be ready this quarter, Habeck said, pointing out that gas will later be replaced with lower-carbon alternatives such as hydrogen.

Germany’s plan could set it apart from some EU countries that are holding on to more stable sources of power, Habeck noted.

“Creating alternative baseload will be a specific challenge. In a way, it will be like teaching an elephant how to dance,” he explained.

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Ammunition for a self-propelled howitzer during a military exercise in Ostenholz, Germany, October 2022.
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After taking power in December 2021, Olaf Scholz’s coalition government presented an ambitious program foreseeing a transition away from fossil fuels to renewable sources of energy.

However, those plans were effectively put on hold after gas prices skyrocketed due in part to Western sanctions imposed on Moscow. Issues with gas pipeline maintenance and then the sabotage of the Nord Stream network further exacerbated tight Russian supplies.

In a bid to ensure energy security, the authorities in Berlin ordered in September that idled brown coal mines could be resurrected. The phasing out of coal-fired power plants was also postponed until March 2024.

21 Feb 2023

EU nation wants Russian oil capped at $30 a barrel – Bloomberg

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Estonia has reportedly urged similar measures to be taken against the sanctioned country’s LNG exports

The EU should lower the $60-a-barrel price cap on Russian oil by half and impose similar measures against the country’s liquefied natural gas (LNG) exports, Bloomberg quotes Estonian Foreign Minister Urmas Reinsalu as saying on Monday.

According to the media outlet, Reinsalu insisted that the current $60-a-barrel limit is “far too high” and should be lowered to $30-a-barrel as “Russia gets billions from that business.”

The price cap on Russian seaborne oil exports of $60 per barrel was introduced by the EU on December 5. It bans Western companies from providing insurance and other services to shipments of Russian oil unless the cargo is purchased at or below the set price.

Brussels has secured commitments from members of the bloc to revise the Russian oil-price ceiling every two months and to set future caps at least 5% below average market rates.

The average price of Urals crude was $46.82 per barrel between January 15 and February 14, according to the Russian finance ministry.

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RT
Russian oil revenues much higher than reported – Goldman Sachs

Estonia has also demanded the imposition of an additional price ceiling on Russian LNG. While Moscow’s oil shipments to the EU have shrunk by two-thirds, according to International Energy Agency, exports of LNG have surged, with France, Belgium, and Spain being the main buyers.

According to Reinsalu, combined measures would create a “holistic approach to pressure Russia” as the EU is looking for more ways to punish Moscow.

LNG production in Russia increased by 8.1% last year to a record 32.5 million tons, the Federal Statistics Service Rosstat reported earlier this month, with 11.5 million tons of the fuel produced at the Sakhalin-2 plant alone.