Friday, September 9, 2022

Who is actually stopping the Russian Gas ???

I thought it was simple enough.  US sanctioned economic transactions with Russia (and simultaneously froze $300B of Russian assets).  Then the US pressured other countries to do the same, and some countries (mostly European ones) agreed.

So it would seem to me that nobody that lives in a country which has applied these sanctions can buy anything from Russia, including gas.

But it's not that simple.  The sanctions might not even apply "directly" to gas.  (I don't think they do.)  But if the sanctions mean that money can't be moved into Russian banks to pay for the gas, well that's pretty much the same thing, right, or should the Russians be providing gas that isn't being paid for???

A Treasury page on sanctions suggests they don't apply to fuels.  But then concedes that all the activities related to shipping fuels are sanctioned.  To get around that, US citizens can apply for a special license (GL 8C):

"Energy-related transactions authorized in GL 8C include payments connected with a variety of upstream and downstream activities, including the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of energy for import from the Russian Federation to countries other than the United States or for export to the Russian Federation, as well as financing, loading, or unloading related to such processes (see FAQ 977).  However, transactions related to new investment in the energy sector in the Russian Federation are not authorized pursuant to GL 8C."

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1010#:~:text=The%20energy%20sector%20of%20the,prohibitions%20issued%20pursuant%20to%20E.O.

This Treasury info suggests that you cannot actually pay for "extraction, production, refinement, liquefaction, gasification, ..." without a special license.  IOW, you cannot buy gas without that license, even though the gas itself is not theoretically sanctions, all those activities related to supplying it are.  Then we don't know if anyone, and in particular anyone in Europe, can get these licenses.

The NYTimes had an article today which was basically about how European countries are planning to get by without Russian gas. Sounds nice but I'm not sure I believe a word of it.  It blames Putin and Russia for stopping the gas.  I believe that's the current editorial standard in the USA.  It says NOT ONE WORD about the sanctions.

CNBC, on the other hand, does give the Russian side of the story ("gas cannot be supplied under the sanctions regime") but then just ignores it without actually disproving it, saying that Russia is trying to "pressure" the west to lift sanctions.

I think that the Russian side of the story is correct, that sanctions prevent the sale of Russian gas to Europe, and western media is trying very hard not to say this.


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