 It's about 115 days since the Ukraine war has begun, 115 days of course of very pitched battles on land as well as a global energy war that has been taking place. We have seen sanctions, counter sanctions, we have seen a lot of discussion, we have seen prices soaring to quite unexpected numbers in fact. And amid all this the fact remains that what the United States and its allies had thought that they would crush Russia, they would crush Russia, they would force Russia into submission by completely starving it of revenues through energy exports. That has not worked at all. We'll be discussing this aspect on this episode of Mapping Fault Lines. We are joined by Praveer Pukhaysar. Praveer, so one of the latest reports that has come out, I mean there's been reports, multiple reports but let's first focus on the larger picture and that has to do with Russia's energy exports over the past 100 days or so the first 100 days of the war. And what it says is that it has earned nearly 100 billion dollars during this period of time. It's quite a large amount. In fact, I believe it's more than what the war has caused them so far. And this seems to be a complete, you know, the opposite of what the United States and its allies had planned, the idea that the sudden flurry of sanctions would completely block Russia at every corner. Russia would be left with energy but in oil and natural gas but no way to export it and would be forced to surrender. So that is definitely not seem to be happening right now. So could you tell us what is the global energy situation right now generally and how this strategy has failed? Prashant, I think the first answer to your question is I don't think they expected that the oil and gas would not flow or would not be able to flow to Europe or other places. They knew that Europe was going to be dependent on Russian gas and oil for quite some time but they thought that they would not have to pay for this. They could retain it within their financial system and retain it in dollars or euros in the case of Europe in euros and then say, well, it's in our banks. You still can't use it. So the idea was to freeze Russian exports not from being able to export but from receiving the money for it, which is what at one point Russia said, we're not fools. You know, we've already seized our 300 billion dollars. We're not going to give you gas or oil and not receive the money and let you keep it. So this is where they switched to that you have to pay us in ruble and therefore the money has to come to central bank of Russia and that the said by you have to deposit in a Russian bank which is not sanctioned. If you sanctioned, of course, then all bets are off. Not sanctioned. They will change it for you and it still will be ruble payment. So this whole issue of opening two bank accounts, how to quote unquote beat the European sanctions, European Union sanctions, that Russia were thought meant that ruble stopped falling. Ruble in fact has become the best performing currency in the last 100 days. In fact, this year it will end up by probably being the best performing currency of the world. And what you are seeing is a drop in euros and also the Japanese yen who are two very large exporters of oil and gas from the international market. So that has been one of the problems that Russia is not only in terms of energy, one of the largest suppliers in the world, but also in terms of other products and we'll come to that later. It is a major supplier. We already have discussed last week about food and fertilizers, but it is also over a whole range of other products that Russia is a major supplier. Coming to the oil and gas issue, we should also include coal because that's really the total energy supplies that Russia makes. If you take the energy sales, the export that Russia has made, oil, gas and coal, then for all three commodities, the prices have been rising. So Russia has made a handsome profit because the prices have gone so far up that even if it makes reduced supplies, which is what it has probably done, they still make profits. More than that, it is now cutting off some of the gas supplies to Europe. There are various reasons for it. One of it is purely technical. Siemens took back a compressor, which was supposed to be sent to Canada and Canadian sanctions meant that the compressor hasn't come back. So that is a snafu. So to say that Germany has landed itself into. But there is also possibility that Russia will cut back gas supplies. They don't want Europe to fill up its stocks so that in winter, they can afford to cut gas coming from Russia and say, we have enough for the next three months. We don't need Russia and gas and put more pressure on Russia. So all these are smaller games that people are paying. The bigger picture, which is what you have said, is that Russia's economy has not collapsed. The intent of the sanctions were the internal collapse of the Russian economy by depriving it essentially of income. And even if the supply supplies, the income would not reach them and they would come to a point where the internal economy would start showing an impact. In fact, initially it did. If you remember, Rubel had gone to 140 rubles to the dollar. Now it has come to 62 or 64 rubles to the dollar. In fact, it's better off than it was for the last two or three years. So given all of this, the so-called nuclear sanctions that the Western imposed on Russia, thinking to convert as Biden said, they are ruble to rubble. Therefore, collapse their external economy and also their internal economy, that has definitely failed. And what has come out is not only in case of energy, but a whole range of other products. The West as well as the world depends a lot on Russia. Therefore, if Russian supplies are taken out, the prices for that go up and you are getting or entering into an area where you have a stagnation of the economy for various reasons, but one of them is the shortage of primary products and the price rising. So you have also an inflation at the same time. So the stagnation, which is what economists think is one of the most dangerous things that can happen to the economies. This is what seems to be happening to the world. And to a lot of the advanced economies, stagnation is an issue, price rise is an issue world over. We have discussed, of course, food prices, but all other prices are rising. And that is, this is creating a really a dangerous situation for all of us, but for the European Union particularly. Absolutely. In context to interesting developments, of course, we saw that the end of last month, the EU said that they are going to try to reduce as much reliance on Russian oil as possible. The agreement was that by the end of the year, 65 percent of Russian imports would be cut and only 35 percent would be retained because Hungary insisted that it was not going to join the complete ban group, so to speak. Meanwhile, the European Union also signing an agreement with Israel and Egypt in terms of importing natural gases, although that seems to be a very small volume. So do we see on the one hand that even over the course of the next six to eight months, whether these sanctions might have more of an impact and are there alternative sources which might be able to take their place? The problem that is there is that when you talk about gas, the solution then is to import LNG, liquefied natural gas. Of course, it has a large impact on in terms of global warming. We will not discuss that today because Europe has also made clear that it is going to use more coal. And if it does, of course, the impact on global warming is going to be significant. So leaving the global warming issue out of it, the question about LNG is the amount of LNG that can be exported from those who produce LNG is limited. There is not enough surplus in the market. And in fact, the United States which could and did ramp up its LNG production has suffered an explosion in one of the facilities which is key to their export of LNG. And then that seems to be out for almost six months. Initially, they said one or two months, but now it appears to be till about the end of the year. So one expectation that they could get LNG from United States has had a setback. Now, West Asia and North Africa, the two other sources of LNG, they do not seem to have enough surplus, significant amount of surplus to be able to give LNG to European Union. Second, European Union does not have the infrastructure right now. They have to create the infrastructure and they say they will do it in one or two years to be able to handle the amount of drop in gas they're going to see if Russia or they stop getting gas from the Russian pipelines. So if that happens, the LNG infrastructure to substitute for that, both in terms of port LNG infrastructure and supplies internally, the pipelines from that to the existing pipelines to route the gas, that doesn't seem to be there. And if it takes one or two years, this is going to be a difficult time for European Union. Now, it's not just a question of gas being used for heating or for production of electricity, the two major demands that is there for gas. It also is a feedstock to chemicals and fertilizers. It is also used for steel plants. So there is a lot of other industries which get affected if the price of gas goes up. So either they have to shut down, some of them are shutting down, which means you will see a much higher rates of unemployment in the European Union. But also it means the price of the fuel that the people use at homes go up. And unfortunately, that's already gone up by almost three times, including in the United Kingdom. So this has really a huge hit on the people because heating is something they'll require in winter, otherwise the freeze. So this kind of threat that energy supplies pose for a country. This is very, very significant, as well as what it poses to the petrochemical sector. For instance, in India, we use it for petrochemical stock for fertilizers and other things. The last part of it, it's interesting, though India is being blamed for buying a discounted Russian crude. This has been, a lot of noise has been made. We now have the figures and the figures show that actually the European countries have bought more crude from Russia than India has. A part of the Indian refined products actually have been sent to the United States. United States is short of diesel, for example. And it is said that Indian refined crude output is reaching the United States. So United States pretends to be very, very sanctimonious and saintly, blaming others. But its allies are certainly taking, lifting more Russian crude than India is. And of course, India has increased its consumption of Russian crude because they're getting discounted prices. But let's not forget, India had cut Russian supplies, as well as Iranian supplies under the US pressure and increased American supplies for its refineries. This was something which was not there about say five years back. So what you're seeing is a natural progression back to what existed that India is to buy Iranian crude as well as Russian crude, depending on the price. In fact, interestingly, Vladimir Putin also saying that this crisis that is coming in the coming months, in fact, could actually overturn some of the elites in Europe because of the internal issues they may face as inflation and other crisis cause massive amounts of resentment among the population as well. So Prashant, what you're raising is actually the question that is troubling a lot of people. Did the United States not make a calculation what the impact of all of this would be on themselves as well as their allies before they went into what would be called the nuclear option of the swift ban as well as seizing for the Russia's foreign exchange, which was lying with them, what are called the dollar and the euro reserves, also the pound reserves. Now, if we take all of that into account, what seems to have been forgotten, and this is a detailed paper by Bloomberg which looked at 2020 and looked at what were the major supplies of critical item from Russia. And they said that Russia is a major major exporter of a whole range of products, whole range of also primary product which every country requires, including the United States. For instance, if we go into little dig into little detail, United States needs a certain kind of crude, which is to come from Venezuela or from Russia. Now they've sanctioned both. So they get into this kind of temporary problems by which then they have how do they produce diesel for their consumption. These are the kind of problems that the United States seem to have gotten into. But the larger issue that Russia is a major primary product supplier to the world market, which Bloomberg calls as a global powerhouse. Now primary products, if you don't get, then you have a huge problem. But if a country which has enough money, and Russia has enough money, as you can see from what we see as the export of just oil and gas and coal. So if we see that into, take that into account, Russia in fact is more self-sufficient because it produces all the primary products. And its import bill is not something which is critical for it, apart from what it needs to import from China. Yes, it needs a certain kind of class of goods, chips, et cetera. But there is enough, at least at the moment supplies that it seems to be available to Russia. And they're not deeply heard by, you know, if you postpone your camera or your computer purchase by a couple of years, it's not going to affect the people that much. But if you're hitting stops or becomes very high price so that you can't avail of it except six hours a day, or for instance, your food stops, then this is really a completely different kettle of fish. It's a huge hit to the people. So I think this kind of simple calculation doesn't seem to have been done by the United States. And this is what people are saying, that did they actually believe that the nuclear sanctions will collapse their economy? And they never did a what if that doesn't happen. And not having done that, they now seem to be floundering. They don't know how to handle this. So they are threatening people, they're doing various things. But the fundamental issue, how to provide food to the people, or how to provide energy to the people, is something which they don't seem to have figured out. And the European Union seems to be, as well as Japan, seems to be much more vulnerable than the United States in this. I'm sure the United Kingdom is in good company with the European Union, despite of the Brexit. So what we are seeing is those who are not primary producers but have survived on what would be called the services economy, financial services, providing black money, safe havens in the basic tax havens that the United Kingdom, for instance, has around the world. City of London is also a major source of that financial services like insurance. This is not going to give you what you primarily require, energy and food. Of course, the United Kingdom is one of the sources of insurance. And let's also look at what has happened that both European Union and the United Kingdom and the United States also wants to sanction insurance companies who insure tankers from Russia, which means they really want to have their cake and eat it to them, want energy from Russia, but also have sanctions on Russia for all of this. So I don't know what they have thought through on this count. What it seems to be the Russia at the moment seems to hold a much stronger hand. We're not talking about militarily, we're talking about economically. In the economic war, if anybody is winning at the moment, it's certainly not European Union, it's certainly not Japan. It does appear that Russia has an edge. And so given all of that, you're absolutely right, European Union seems to have shot itself in the foot. And how it will get out of it, we don't know because there still seem to be going on the bankrupt sanctions path, trying to ratchet up the pain on Russia, while the pain on them seems to be only increasing. Thank you for talking to us. We'll be covering such similar issues in future episodes of Mapping Frontlines. Until then, keep watching NewsClick.