rails of deliberately destroying is a positive, a lifelines they have left with detailed coverage these what your planes have targeted this pool which is chilled ranch thousands of housing is, will have been forcibly displaced from the hoss at the story. is very systematic and deliberate. destruction of goals. what was that infrastructure has left more than 2000000 people in a space of commerce can struggle ukraine. shouts of russian gas, the europe through. it's tara trade. off the, a pre war deal expire yet russian gas suffice to be shipped a russell, 11th western fuels science is imposed over the triangle cuts in europe and russia. this is inside story, the

hello and welcome to the program. and we're on con, the ukraine will, has led to the west imposing some of its harshest sanctions on russia. pipelines supplies have been drastically cuts yet. russian liquid natural gas is being shipped into your at record levels. while the will continue use your most important economy. gemini, has led into recession, so have fuel, the sanctions against russia, worked out as planned, or all that hurts in europe, more than russia will talk to august shortly. but 1st, this report from victoria getting the, as russia and the say, the union spend half a century becoming a major supplier of gas to europe. but the war in ukraine has oh, but destroyed that business for the state energy giant gas problem. and now rushes oldest gas supply line to the european union through ukraine. his shots after a 5 year deal between moscow and keys expired with through the list of point is uh,

we will always in favor of gas appliance of the supplies being above politics of the and being purely economic methods. we never said nothing to supplies to europe . ukraine, nearly a $1000000000.00 in transit fees last year. faucet says, payments for the gas of helped russia to wages will run the country. russia is expected to lose $5000000000.00 annually. european country most affected by the end of the transit deal is mold a is a, it's not part of the european union. it's being forced to impose a 60 day stage of emergency and its energy sector before rush or invaded ukraine in 2022. it was the biggest supplier of gas to the blog, providing more than 40 percent in 2021. bob since reducing its dependency after that invasion, the you impose it about 8 percent in 2023. we are alternatives, but they are tend to be a bit more expensive than the russian pipeline. guess the impact will be solid,

especially in australia and hungry in slovakia, where the price of gas will likely rise. and this could have an impact on the consumer prices on the cost of living, but also on, on prices for industry. the most rushing gas roots to your up a shot, including the node stream to pipeline, onto the bolts. it was blowing up in 2022 spots to shut down the pipeline through. ukraine will not stop rushing gas from entering europe. the tux stream pipeline is still operational supply and gas. this just took it then to hungry and sub you choose to import the russian liquefied natural gas to the you reach record highs last year, raising questions about the effectiveness of the sanctions on russia. the design to limit funding for its war in ukraine. victoria gave some b. l. g 0 for inside story.

that's bringing out guess been iris is found an editor in chief of business news europe. he joins us from berlin. natasha fielding is editor, august media, an energy and commodity price agency. she joins us from london and alex tito is electra at queen's university both fast and a specialist in russian foreign policy. he joins us from of intends in italy. a woman welcome to you. oh, i want to start with alex 1st. so we have this new reality where there's no russian gas coming in via ukraine. but is it as simple to say the russia has somehow beaten europe sanctions as well, depending of what you want to see if they can have effective look sanctions where originally intended to be if it were intended to be, to fill out the structure of the economy and to make it a financing a little more impossible, they obviously have filed russia has continued to uh,

accumulates um, uh for, for an um, for the reserves sides, it still gets a lot of money from sending energy to the world markets. if you think about your dependency relation dependence on russian gas, which i think a see if there's open coffee, steam that is pretty huge. exaggerated in europe has not post on function with all the russian gusts of. um, uh, included, russia has stopped functioning without sitting is goes to europe. so i saw the i, the sides have been blow so robust to rush cuz lots of ready to use from gas. but i have to say that's most of for us and revenues from southern energy costs from oil anyway. so we were as gospel rushing. my statement opening of god for gas has been huge, very hot in terms of losing its most lucrative market to um, to sanctions, uh, uh, the roster itself has been able to find ons. um, you know, it's more and it's um, um economy because it says of tentative supplies to europe which including building

up a new and used supplies to places like india, which kind of a sold before uh, forgot. it's much more difficult for russia, but uh so its not so easy for you to buy them. so they both be unaffected. natasha . um, one of the things that's interesting about all of this is there seems to be certainly for russia and for european countries, the want cheaper gas will try and get more gas. is that all the low loopholes in the sanctions that have been exploited? i mean, the sanctions are pretty useless all by to them. so interestingly, that all know any direct sanctions preventing russian pipeline gas or russian liquefied natural gas from entering europe. and we saw a domestic reduction in europe, russian pipeline gas in ports in 2022. that was not down to

a direct sanctions and we are still seeing a strong deliveries of liquefied natural gas into, into europe, from russian terminals. so in, in that sense, and also the, this, as the mentors day for, for the european gas market where ukrainian transit halted. but that was really not found to sanctions, but rather to the expiry of the russia you train transit deal and to ukraine's unwillingness to sign a new deal for that transit to continue. but it's a very interesting with natasha is just use is momentous. is meant to stay because ukraine has said enough is enough. this a business deal? no sanctions deal. we can get rid of this deal if we want to. and actually it's hurting us cuz but billing those billions are being used to kill our people,

say business as trying stover sanctions political sanctions. is that right? you can put it that way. i'm having the business, i guess. um, but i as, as i said, i mean, you should be clear that there's no sanctions on importing by some gas. and this is a pragmatic thing where many countries have chosen to try and wing themselves of russian gas gemini, being the biggest example in so much as it was entirely dependent on inputs of gas fi, pipelines. and the north stream to pipelines were blown up in september and those were the main pipelines that were landing in germany. um, but one of the strands is still intact and could deliver gas. but germany is taking the principle of the system not to use that will restart that despite the fact goods and offered shots to turn them back on again. and it switched to n n g a great expense because it had no energy terminals. um, but as you know, hired these floating terminals, but the whole business uh,

the account economics surrounding the gas. i'm, it, it's cause you're a huge problem because energy prices here, and you're now double what they were despite those huge spiking prices in 2022. and the prices are coming down, but the prices remain double what the long term average pretty well was. and so you crane, i mean, that was so like in a cut that most of the sudden extent because they were making a $1000000000.00 a year in transit fees, which ironically, or with a gas problem was continuing to pay kids throughout the last 3 years of pool and on the other hand, the ukrainians are arguing that the gas problem was ending $6500000000.00 a year from exports in gas to europe. and that money was going straight back to fund the war machine. and so the ukraine trainers we put in the really bizarre position whereby they were facilitating a business that gas problem was doing that was raising money for the coming that was then being pulled into the war against ukraine. and so i think this is the

logic behind some excused decision to forgo the opinions of those which they desperately need and you kind is incredibly short of cash. nevertheless, his argument is. ringback that we will cut semester off from this $6500000000.00 in order to make it more difficult for them to fund the war. and because russia is struggling to fund, the boy is running it, budget deficits, economies of the heating it needs every penny and, and now it's been cut off from a business has been running for 50 years. 17. in the seventy's, the street was hooked up to the pipeline. the 1st gas arrived in europe and throughout the cold war. this gas and this business continued to flow despite the geopolitical tensions. zip code for your continued supply gas and 70 percent versus expos, guess capacity is pipelines run to the run. so you're on the west and that's now stops. and i've seen it many parts of the pipelines and the staff, and brush a,

you know, it has looking to, to transport this gas east. but there's no pipelines and those things are incredibly expensive to build and they take at least the decades to construct. so this is a really big historic moment where russians infrastructure energy infrastructure is not useless. it's just sitting there, have a copy use i'm gas from has been cut off from, from the billions and billions of dollars that it used to and from exports into your a tasha spanish just said that the, the russian infrastructure is useless. it is useless right now, but the infrastructure isn't going to go away. is there a chance that russia can save the day somehow by doing a strictly business deal with other countries? i am. so it's, it's correct to say that us now that, that russian gas is no longer flowing to through ukraine and into other european

countries. the gas cannot simply be redirected elsewhere. it cannot be redirected into, for example, l n g export facilities. and given that ukraine is a key transit market for the rushing gas to and to europe without a, a deal and an interconnection agreement between russia and ukraine. it is impossible to uh, to, to have for that rushing gas to enter your through train. uh so um, at the moment, uh, in terms of the other available routes, the now the only route for rushing pipeline gas to get to your is through the texas stream pipeline. now there is a little bit of scope for those flows to increase this year. the pipeline did run on the capacity,

but that would no and then make up for the loss of ukrainian transport. and and of course, at china is another big sales market for, for russia. but it will take a while to build additional infrastructure to ramp up those exports to china much further. other seats of the, of the market size natasha is pointed out for russian energy supplies. whether it is you know, whether is a gas. however, january 20th is coming and is coming very quickly, trump will be impala in the us. let him, if he gets in is probably glad of that thinking, but he might well get a deal that's in his favor when it comes to ukraine. is there a way that you see that the americans will somehow force ukraine to accept a deal that brings back that ukrainian transit points back in?

is that going to be part of trumps thinking? do you think a no, don't think so because 1st of all, for united states themselves they, they need to take it off from interest. and i was just surprised as to to europe, where i've been trying to replace a russian gas pipeline with allergy and it's been always economically more bible to buy gas off for russian. you know, in europe i, it was a because we're doing good out of charity. it was just because russian gas was competitive compared to other alternatives for decades previous to there's absolutely no reason for trump to want to have these a gas to come back. but also, i think, you know, there is a class data type for related in to do that extend implemented, you repeating you, commission policy of we in europe of russia's ross was golf for auto signage and on any trade was, were actually did. and it's very difficult to see why trump would want to force it

on your vehicle, don't want it forces on ukrainian. so don't wanted and russia itself. and i, even though it was, you know, we bought into uh, got supply, but they really don't want to. you know, what could i deal says such a scenario straight. we do find why you create high that means wanted to restore if, if it was the results of savings to you, they would want to just um, remaining um notes due to pipeline which hasn't been blowing off yet. um and uh, the guest prospects don't, don't look good so far for russia about the time, you know, they're not in terms of the energy, which i think they just finishing a new facility on the multics which can use double the gas from the for just as an old stream. uh they did the ra pipelines to china. the only problem is that the new pipeline which would come from the, the gym all opinions july. his chinese, the, i think very hard negotiations on the doesn't seem to be going anywhere anytime

soon. but broadly speaking, i so they will survive it. you know, it's not, belittle, could you have a rising process of domestic life for, for gas prompted, compensated somehow for the last 7 years from europe. but um, the gas pipeline would have to be in this i think, i think very few backup protection with won't come ukrainian. um, augusta back and the home it goes on. i mean the, there might be no be anything left. so if you couldn't guess, i guess, but, but anyway, but not just because rush of my bone, but it's which it might, but also because, you know, it's very expensive to maintain it without transit fees, without guessing going through it without money getting, getting from it. so i don't see where you credit, so i have the capacity, i have the potential technical to actually to preserve the gas pipeline anyway in the long term. well, let's get into the politics of this now up. and one of the key things here is jim,

and he is one of the key is the biggest economy in europe. it's, it's suffering because of the principles found that they took against getting russian. they really led the way when it was a russian sanctions and not getting russian products into european markets. but the thing now is to the point where is having an impact on domestic politics, right? yeah, i'm gemini, is in a, in a horrible position, like i say pre award. it was in the exports or power, but then the top of why me, they suffered a, having the cheap russian gas turned off. and germany was another for the rest of europe because the most stream to pipeline lines that in germany and then it was distributed. so and generally also has the biggest european e u storage tanks. and so is supplied a lot of countries around it. it's really in particular and that stops at the same time, that's enough to make you to pass stations. and so suddenly there's been an energy deficit, and that's costing the economy that the price is

a gas in germany. i said before that they're already twice as high as pretty well, but in germany, the twice as high again as the rest of your and the industrial over here, i can tell you the, the pushing very hot time, the gas back on through this. but the surviving strand of the node strain, which would be 25000000000 cubic meters gear. and for that it's concepts. you're used to in court, a total of a $150.00. but um, the, the, the economics some in germany is going to the recession and it's being the industrialized that you've got a whole class of heavy and factories pets, chemical ponds, refineries, power that are no longer economically vi. and that problem can be fixed. i mean that there's no short term solution to that. and so a 3rd attempt, germany's companies have already left the country because it just simply doesn't work anymore. the is too expensive to operate and another set of talking about

leaving. and so domestically um, germany's already suffering from a competitive problem and now is energy costs twice that of the rest of europe, which is twice that of what that is in the states and germany and you as a whole is slipping behind. and that's a problem for everybody because as you know, as white, so germany is the, is the economic engine for europe. and if germany's finest as which it is, then that bodes well uh ill. so the rest of the year be, and economy is going forward. uh natasha. its a horrible word to use, but contagion coming from you. no rush. uh no. being able to get his gas into europe and then back affecting germany and then jeremy's gonna think smaller european countries. this is going to spread and it is spreading right now. throughout your right. oh absolutely, yeah. there's a, there's a knock on impact. so it is primarily a central needs to european countries that are directly affected by this whole and

you create in transit, austria, so back you check a public, moldova. i bought uh that uh, that suspension of russian and gas supply through ukraine means that those countries need to replace that gas with supply from elsewhere. gemini is a f, as is a key, nit next door markets to receive the attentive gas supplies. so that will be a more of a pool on gas from west to east, which will in tend require more withdrawals from gem and underground storage. and it's really poses a challenge, not just for the rest of this winter, but for next summer. when those a storage tanks underground storage is as we'll need to be refilled ahead of the following, went to and doing that without a that russian gas the ukraine it, it creates a tight to market. and this is especially in the context of

a tight global gas smoke it in europe, has primarily replaced rushing gas with liquefied natural gas, which it must compete with asian buyers. and we have see the much more competitive environment for a l n g a. this went to them the last winter. so we're at as we have this kind of combination of, of events like say top, is there an opportunity then for russia, natasha has just said europe could face a crisis. not this coming winter, but yeah. then the next coming winter of that little, the gas runs out, is there an opportunity here for russia to either increase applies to other buyers and try and stop europe? how is there any kind of opportunity here as well? i mean, the circuits do detroit lie. i took a statement, a surprise and you're

a goes off. i mean, they will get more money of from what it was remaining of the guys pipeline, but it's ok plus whole. so of course energy which they still sell to you, how to do euro and a g m a n g by its nature to make more like, or good approach and go to market in the sense that it can be shipped to global a ross. it has kind of beauty facility just to ship more, to add to asia, particularly building out its exit from a buy another tech from him albany. and so uh, the moment its all our facing west spots, my moving months come to you or you were. i think the thing i'm thinking over imposing sanctions of transport from transits um ebony transitional by repeated thoughts to sort of feel that i felt a rush has been developing. it's trained to reform email via come child because of the beauty facility is there. and then on to the east asia, which is the traditional getting kind of more of a high high mileage you processed for venue way. so uh,

a rush to will benefit from uh, increasing general uh items to the market. so for increasing in the, um and the price is for the g of for gas. and um, but yeah, i mean it's, it's the gas pipeline is a, is a such a thing that, you know, it takes us to build. and the real into an interest rate is just china and china's bang battery. horrible that you'll be able to send up a whole lot of balls to be to me, china now is actually after you create installed, is it possible but then goes to the bottom, then you're right, the 1st time ever as well. so alex, we all running out of time and i wanna, i wanna bring your point. so the other guess is, well ben, what are the words that we've heard here is winning. we were, you know, europe is trying to win afresh. and guess when we've heard that from the americans, as we are trying to wean off the middle eastern oil, but it never really works. is there a case to be said the in a few years time, maybe even shorter than that. but we're going to back to business as usual,

when it comes to russian gas, just because it's convenient and easy. it's already business as usual. and so much as you know, this, this idea of winning or for us and gosh, i guess is a, is a fiction because europe is, is still dependent on russian gas, not in the same way that it was before when inputs 35 percent of discussed with russian gas, nevertheless, it con, do with that to and that's estimated very good point the, you know, the, the tanks and you were ready emptying at a much faster pace than i did the last 2 years. it's not a catastrophic pace, but you know, the tanks are on cost to be pretty empty by the end of this winter. and then that gas to refill them has to come from somewhere. and with that. but i guess you can't get through the winter and the i'm sorry the the pick up on that point as well. bring it home and i just want to get some to tasha and to alex as well. natasha have then the, the sanctions, the business deal of all of this idea of getting gas into europe via russia just

been temporarily posed and it will come back at some point. and i say this is one of the biggest questions on, on european trade. his minds will not rushing guess come back. i think one thing we've learned from the european gas market over the past few years is that it's anything but predictable. what i would say is that europe has now invested heavily in getting alternative supplies. it's really built up, it's l n g in full capacity in order to make do without that rushing gas permanently. so as we can see, the future, i think uh the what happens with the wall will really help to determine whether russian gas comes back to europe and cope without if i say so just very quickly then have of has the sanctions failed? it has um the wherever, everything that you was trying to do has filed and all right,

so really needs to do is just wait to out. you know, the weight of the weight in the wall. i mean, because at the moment they are waiting on the battlefield and i think that's about it. so, i mean, what, what is the gosh, what happens to guessing all the things that we will have to be a political acceptance and you'd have to make a change of new policies in europe as well. we've been going to germany possibly for us and decided century 2657. uh that, uh you cons, defeat restaurant can only, can you come to the trash on the battlefield context all the help that you'd have to do it. and maybe you can, gas will become part of the kind of lot to deal with russia to, to settle that ukrainian more. but you know, this is, you know, looking into the, i'm, i couldn't figure out if nothing for versus a few grand continues to lose on the battlefield. then, you know, anything can happen. what will be the big deal and they handle this war and nobody knows what i want to thank oh guess. then iris natasha fielding and alex tito,

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