This side of the pipe
When that plan failed, energy blackmail became one of the main instruments of Russian foreign policy (at least in relation to Europe). Inside Russia, politicians, bureaucrats and analysts of all stripes (and then the media) began to actively push the thesis that Europeans were suffering much more from the sanctions, while Russia, on the contrary, was only reaping the benefits. The price of gas and oil was cited as an argument: the latter soared to $ 140 per barrel in March 2022 before correcting slightly, though it hardly dropped below $ 100 per barrel until August.
Throughout the spring and summer, Russia and the West (including Western analysts) were calculating the windfall profit for the Russian oil and gas sector from the unfolding energy crisis. In fact, however, everything has turned out much less rosy for Moscow.
For example, Gazprom supplies piped gas (it is the main method of delivery for exports) not at market prices but under prices fixed in long-term contracts. Moreover, prices are much lower for China – where Russian exports are rising – than for Europe. Yet taking into account the drop-off in deliveries to Europe (they look set to fall by half for the year), it’s not a given that the company will manage to just repeat its 2021 financial performance. The situation is complicated for oil companies as well. Since the outbreak of the war, India and China have become the main buyers of Russian commodities. Deliveries to these countries (especially to India) have increased manifold. It’s only in Asia they’re ready to take Russian oil – but with a very big discount.
The real numbers are very different from market prices. In early November, the Russian Finance Ministry reported that the average price of the Russian brand Urals was $ 79 per barrel for the first 10 months of the year and just over $ 70 in October. A year ago, the same barrel cost more than $ 80. In addition, Russian oil companies, firstly, weren’t forced to reduce production because of sanctions and, secondly, could pump oil to Europe through pipelines, which is much cheaper than delivering it by tanker.