Putin Says Russia Will Honor Gas Commitment But Flows Will Drop As Much As 20% Of Capacity

> Russia is seeing massive oil profits now. They have over the last six months after they caught the world off guard with their erratic behavior, but will they make massive profits over the next 6 years or 60 years? Their best customers are dumping them in mass, but that takes time for the effects to be seen. With a bit of foresight and thought we can think about how it will likely go, however. > Why would they really want to trade with countries with crippling sanctions against them when they can just go south and east? Because that's where the biggest and richest market is. It's the same reason China is dependent on Europe and America to buy their shit. And that's where their pipelines and infrastructure go. They can't just turn off the pipelines flowing to Europe and redirect that gas to China and India. And it's hard for them to ship the oil to those places to given all the sanctions and insurance difficulties for oil tankers and traders. Over the longer term, they will probably be able to redirect some of it, but they will have to accept sub-market rates on the reduced volume. How exactly is this helping them come out ahead compared to the status quo pre-invasion? Regarding high profits now, of course they are doing fine now that prices are high and they're still shipping volume to Europe. The point is the scenario changes dramatically for them when one (or both!) of those things change, as they inevitably must. On the volume side, Europe sees it can't allow Russia to dangle the energy weapon over them, so they are diversifying sources like crazy, and in a few years Russia won't have any power at all for cutting off supplies. On the high prices side, energy prices are highly volatile and tend to overshoot. Given that we're likely headed for a global recession and unrest caused by the high energy and food prices, I expect oil prices will tumble within the next 2 years. It's going to be an absolute clusterfuck for them when oil prices fall. Combine tens of thousands of men in their prime dead or scarred for life coming back to economic fuck-all back home, collapsing government revenues and no ability to pull in competitive outside investment, a devastated army, sanctions denying them the ability to import needed high-tech electronics and mechanical parts for maintenance or building anything new, a disastrous age structure with no signs of getting any better with all this going on, and brain drain of all those with skills who see the writing on the wall, satellite states in Central Asia seeing Russia's weakness and increasing Chinese influence as an opportunity for more autonomy and playing both sides, and there really isn't much to be optimistic here for the nation's future. They have a big country with many resources, but will they be able to hold it together and manage it responsible with good leadership? Their cultural history isn't very optimistic on this either with periods of empire and periods of collapse. The point is if you are a petro state, threatening to cut off gas to your biggest customers is like threatening to use a grenade in a bar fight. Whatever happens, it's not going to leave you in a stronger position after you do it, and it really shows bad judgment and that you don't have any real strengths going on so you decided to resort to such a poor choice.